10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 31, 2014

o           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT

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)	(IRS Employer Identification No.)

370 Lexington Ave., Suite 1806, New York, NY 10017

(Address of principal executive offices)  (Zip Code)

(212) 239-2666

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x   Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 504 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to file such files).   x Yes   o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   o Yes  x No

As of December 15, 2014, we had 26,893,212 shares of common stock issued and outstanding.

SPARTA COMMERCIAL SERVICES, INC.

FORM 10-Q

FOR THE QUARTER ENDED OCTOBER 31, 2014

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets  as of October 31, 2014 and April 30, 2014	3
	Condensed Consolidated Statements of Losses for the Three and Six Months Ended October 31, 2014 and 2013	4
	Condensed Consolidated Statement of Deficit for the Six Months ended October 31, 2014	5
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended October 31, 2014 and 2013	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosure	30
Item 5.	Other Information	30
Item 6.	Exhibits	30
Signatures		31

PART I. FINANCIAL INFORMATION

ITEM 1.                FINANCIAL STATEMENTS

SPARTA COMMERCIAL SERVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	October 31, 2014			April 30, 2014
	(unaudited)
ASSETS
Cash and cash equivalents	$	9,558		$	70,456
Accounts receivable		164,678			182,343
Property and equipment, net of accumulated depreciation and amortization of $201,160 and $199,367, respectively (NOTE B)		8,181			9,974
Goodwill		10,000			10,000
Other assets		50,887			60,992
Deposits		117,178			40,568
Total assets from continuing operations		360,481			374,333
Assets from discontinued operations (NOTE C)		49,233			90,024
Total assets	$	409,714		$	464,357
LIABILITIES AND DEFICIT
Liabilities:
Accounts payable and accrued expenses	$	1,313,311		$	1,259,368
Notes payable net of beneficial conversion feature of $366,434 and $296,384, respectively (NOTE D)		2,370,923			2,019,879
Loans payable-related parties (NOTE E)		385,853			385,853
Derivative liabilities		755,571			601,000
Total liabilities from continuing operations		4,825,660			4,266,100
Liabilities from discontinued operations (NOTE C)		97,465			130,420
Total liabilities		4,923,125			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, 67 and 157 shares issued and outstanding, respectively		670			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; 740,000,000 shares authorized, 24,397,250, and 20,987,353 shares issued and outstanding, respectively		24,397			20,987
Common stock to be issued, 407,050 and 283,777, respectively		407			284
Preferred stock B to be issued, 29 and 72.48 shares, respectively		29			72
Additional paid-in-capital		41,621,763			41,738,613
Subscriptions receivable		(903,309	)		(2,118,309	)
Accumulated deficit		(45,920,041	)		(44,257,306	)
Total deficiency in stockholders' equity		(5,163,583	)		(4,601,588	)
Noncontrolling interest		650,173			669,424
Total Deficit		(4,513,411	)		(3,932,164	)
Total Liabilities and Deficit	$	409,714		$	464,357

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

3

SPARTA COMMERCIAL SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF LOSSES

FOR THE THREE AND SIX MONTHS ENDED OCTOBER 31, 2014 AND 2013

(UNAUDITED)

	Three Months Ended						Six Months Ended
	October 31						October 31
	2014			2013			2014			2013
Revenue
Information technology	$	138,074		$	118,047		$	270,881		$	254,164
Cost of goods sold		48,470			38,715			86,047			76,291
Gross profit		89,604			79,333			184,834			177,872
Operating expenses:
General and administrative		685,680			363,382			1,217,394			711,829
Depreciation and amortization		897			357			1,793			2,778
Total operating expenses		686,578			363,739			1,219,188			714,607
Loss from continuing operations		(596,974	)		(284,406	)		(1,034,353	)		(536,735	)
Other (income) expense:
Other income		(5,011	)		(17,691	)		(15,779	)		(38,195	)
Interest expense and financing cost, net		159,810			88,088			246,651			186,121
Amortization of debt discount		189,324			120,451			314,065			195,942
(Gain) loss in changes in fair value of derivative liability		203,825			(27,403	)		(8,704	)		26,720
Total other expense		547,948			163,444			536,233			370,587
Net loss from continuing operations	$	(1,144,922	)	$	(447,850	)	$	(1,570,586	)	$	(907,322	)
Net loss from discontinued operations		(16,653	)		(267,992	)		(111,017	)		(278,613	)
Net Loss		(1,161,575	)		(715,843	)		(1,681,603	)		(1,185,934	)
Net loss attributed to non-controlling interest		7,460			18,304			19,251			27,969
Preferred dividend		(191	)		(39,764	)		(382	)		(79,097	)
Net loss attributed to common stockholders	$	(1,154,306	)	$	(737,302	)	$	(1,662,735	)	$	(1,237,064	)
Basic and diluted loss per share	$	(0.05	)	$	(0.03	)	$	(0.07	)	$	(0.06	)
Basic and diluted loss per share attributed to common stockholders	$	(0.05	)	$	(0.05	)	$	(0.07	)	$	(0.08	)
Weighted average shares outstanding		21,906,215			15,823,610			22,275,630			15,994,720

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

4

SPARTA COMMERCIAL SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENT OF DEFICIT

FOR THE SIX MONTHS ENDED OCTOBER 31, 2014

(UNAUDITED)

	Series A				Series B						Series B
											Preferred Stock									Common Stock									Additional						Non-
	Preferred Stock				Preferred Stock						Shares to be issued					Common Stock				to be issued						Subscriptions			Paid in			Accumulated			controlling
	Shares		Amount		Shares			Amount			Shares			Amount		Shares		Amount		Shares			Amount			Receivable			Capital			Deficit			Interest			Total
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		$	(44,257,306	)	$	669,424		$	(3,932,164	)
Correcting																	345				(430	)		(1	)					15									14
Redemption of preferred B stock						(90	)		(900	)		(43	)														1,215,000			(1,330,164	)								(116,107	)
Derivative liability reclassification																														81,821									81,821
Sale of common stock																	1,954,496		1,955		84,023			84						495,439									497,479
Shares issued for financing cost																	156,644		157		(31,778	)		(31	)					60,493									60,619
Shares issued for conversion of notes, interest and accounts payable																	1,026,523		1,026		11,458			11						371,490									372,527
Stock compensation																	240,109		240		60,000			60						126,628									126,928
Employee stock & options expense & revaluation																	31,780		32											77,428									77,460
Net loss																																	(1,662,735	)		(19,251	)		(1,681,986	)
Balance October 31, 2014		125	$	12,500		67		$	670			29		$	-		24,397,250	$	24,397		407,050		$	407		$	(903,309	)	$	41,621,763			(45,920,041	)	$	650,173		$	(4,513,410	)

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

5

SPARTA COMMERCIAL SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED OCTOBER 31, 2014 AND 2013

(UNAUDITED)

	Six Months Ended
	October 31
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(1,662,735	)	$	(1,237,063	)
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustments		-			(71	)
Dividend on preferred stock		382			79,097
Loss allocable to non-controlling interest		(19,251	)		(27,969	)
Depreciation and amortization		1,793			2,778
Amortization of debt discount		314,065			195,942
Change in fair value of derivative liabilities		(8,704	)		26,720
Shares issued for finance cost		60,619			26,872
Shares issued for interest payable		127,304			-
Equity based compensation		204,386			119,037
(Increase) decrease in operating assets:
Accounts receivable		(98,442	)		(64,117	)
Prepaid expenses and other assets		-			-
Restricted cash		-			-
Other assets		(66,505	)		10,705
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses		38,375			4,707
Net cash used in operating activities		(1,108,713	)		(863,363	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash provided by investing activities		-			-
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from sale of common stock		497,478			513,161
Net proceeds from convertible notes		485,000			460,263
Net payments on notes payable		(97,500	)		(137,500	)
Net proceeds from other notes		155,000			25,000
Net (payment of) loan proceeds from other related parties		-			(7,407	)
Net cash provided by financing activities		1,039,978			853,517
Cash flows from discontinued operations:
Depreciation of assets of discontinued operations		10,902			-
Cash (used in) operating activities of discontinued operations		-			(9,197	)
Cash provided by investing activities of discontinued operations		-			-
Cash (used in) financing activities of discontinued operations		(3,065	)		-
Net Cash flow from discontinued operation		7,837			(9,197	)
Net (decrease) in cash	$	(60,898	)	$	(19,043	)
Unrestricted cash and cash equivalents, beginning of period	$	70,456		$	38,213
Unrestricted cash and cash equivalents, end of period	$	9,558		$	19,170
Cash paid for:
Interest	$	27,359		$	10,807
Income taxes	$	944		$	3,664

Non-cash investing and financing activities: Note I.

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

6

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2014

NOTE A – SUMMARY OF ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements as of October 31, 2014 and for the three and six month periods ended October 31, 2014 and 2013 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission, including Form 10-Q and Regulation S-K. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments), which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. The Company believes that the disclosures provided are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the audited financial statements and explanatory notes for the year ended April 30, 2014 as disclosed in the Company’s Form 10-K for that year as filed with the Securities and Exchange Commission.

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Specialty Reports, Inc. All significant inter-company transactions and balances have been eliminated in consolidation.

Business

Sparta Commercial Services, Inc. ("Sparta" "we," "us," or the "Company") is a Nevada corporation. We are a technology company that develop and market mobile app tools, products and services. We also provide vehicle history reports and a municipal leasing program.

Our roots are in the Powersports industry and our original focus was providing consumer and municipal financing to the powersports, recreational vehicle, and automobile industries (see Discontinued Operations). Presently, through our subsidiary, Specialty Reports, Inc. (SRI), we offer Mobile App development, sales, marketing and support, and Vehicle History Reports.

We have expanded our mobile application (mobile app) marketing efforts beyond vehicle dealers to a variety of businesses including, but not limited to, restaurants, hotels, and grocery stores. We also private label our mobile app framework to enable other businesses to offer custom apps to their customers.

Our vehicle history reports include Cyclechex (Motorcycle History Reports at www.cyclechex.com); RVchex (Recreational Vehicle History Reports at www.rvchex.com); CarVINreport (Automobile at www.carvinreport.com) and Truckchex (Heavy Duty Truck History Reports at www.truckchex.com). Our Vehicle History Reports are designed for consumers, retail dealers, auction houses, insurance companies and banks/finance companies.

Sparta also administers a Municipal Leasing Program for local and/or state agencies throughout the country who are seeking a better and more economical way to finance their essential equipment needs, including police motorcycles, cruisers, buses, and EMS equipment. We are continuing to expand our roster of equipment manufacturers and the types of equipment we lease.

The results of operations for the three and six months ended October31, 2014 are not necessarily indicative of the results to be expected for any other interim period or the full year ending April 30, 2015.

Estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

7

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2014

Discontinued Operations

As discussed in NOTE C, in the second quarter of fiscal 2013, the Company’s Board of Directors approved management’s recommendation to discontinue the Company’s consumer lease and loan lines of business and the sale of all of the Company’s portfolio of performing RISCs, and a portion of its portfolio of leases. The sale was consummated in that quarter. The assets and liabilities have been accounted for as discontinued operations in the Company’s consolidated balance sheets for all periods presented. The operating results related to these lines of business have been included in discontinued operations in the Company’s consolidated statements of loss for all periods presented.

Revenue Recognition

Revenues from history report and mobile app products are recognized on a cash basis.

The Company’s leases, which are included in Discontinued Operations, are accounted for as either operating leases or direct financing leases.  At the inception of operating leases, no lease revenue is recognized and the leased motorcycles, together with the initial direct costs of originating the lease, which are capitalized, appear on the balance sheet as “motorcycles under operating leases-net”.  The capitalized cost of each motorcycle is depreciated over the lease term, on a straight-line basis, down to the Company’s original estimate of the projected value of the motorcycle at the end of the scheduled lease term (the “Residual”).  Monthly lease payments are recognized as rental income.

Direct financing leases are recorded at the gross amount of the lease receivable (principal amount of the contract plus the calculated earned income over the life of the contract), and the unearned income at lease inception is amortized over the lease term.

The Company’s Retail Installment Sales Contracts (“RISC”), which are included in Discontinued Operations,   are secured by liens on the titles to the vehicles.  The RISCs are accounted for as loans.  Upon purchase, the RISCs appear on the Company’s balance sheet as RISC loan receivable current and long term.  Interest income on these loans is recognized when it is earned. 

The Company realizes gains and losses as the result of the termination of leases, both at and prior to their scheduled termination, and the disposition of the related motorcycle.  The disposal of motorcycles, which reach scheduled termination of a lease, results in a gain or loss equal to the difference between proceeds received from the disposition of the motorcycle and its net book value.  Net book value represents the residual value at scheduled lease termination.  Lease terminations that occur prior to scheduled maturity as a result of the lessee’s voluntary request to purchase the vehicle have resulted in net gains, equal to the excess of the price received over the motorcycle’s net book value.

Early lease terminations also occur because of (i) a default by the lessee, (ii) the physical loss of the motorcycle, or (iii) the exercise of the lessee’s early termination.  In those instances, the Company receives the proceeds from either the resale or release of the repossessed motorcycle, or the payment by the lessee’s insurer.  The Company records a gain or loss for the difference between the proceeds received and the net book value of the motorcycle.

Inventories

Inventories are valued at the lower of cost or market, with cost determined using the first-in, first-out method and with market defined as the lower of replacement cost or realizable value.

Website Development Costs

The Company recognizes website development costs in accordance with Accounting Standards Codification (“ASC”) 350-50, "Accounting for Website Development Costs." As such, the Company expenses all costs incurred that relate to the planning and post implementation phases of development of its website. Direct costs incurred in the development phase are capitalized and recognized over the estimated useful life. Costs associated with repair or maintenance for the website are included in cost of net revenues in the current period expenses.

8

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2014

Cash Equivalents

For the purpose of the accompanying financial statements, all highly liquid investments with a maturity of three months or less are considered to be cash equivalents.

Income Taxes

Deferred income taxes are provided using the asset and liability method for financial reporting purposes in accordance with the provisions of ASC 740-10, "Accounting for Uncertainty in Income Taxes (“ASC 740-10”)." Under this method, deferred tax assets and liabilities are recognized for temporary differences between the tax bases of assets and liabilities and their carrying values for financial reporting purposes and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be removed or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.

ASC 740-10prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740-10 also provides guidance on derecognition, classification, treatment of interest and penalties, and disclosure of such positions. As a result of implementing ASC 740-10, there has been no adjustment to the Company’s financial statements and the adoption of ASC 740-10 did not have a material effect on the Company’s consolidated financial statements for the year ending April 30, 2014 or the three months or six months ended October 31, 2014.

Fair Value Measurements

The Company adopted ASC 820, “Fair Value Measurements (“ASC 820”).”  ASC 820 establishes a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets the lowest priority to unobservable inputs to fair value measurements of certain assets and Liabilities.  The three levels of the fair value hierarchy under ASC 820 are described below:

·   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.

This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. For some products or in certain market conditions, observable inputs may not always be available.

Impairment of Long-Lived Assets

In accordance ASC 360-10, “Impairment or Disposal of Long-Lived Assets,” long-lived assets, such as property, equipment, motorcycles and other vehicles and purchased intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows or quoted market prices in active markets if available, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

9

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2014

Comprehensive Income

In accordance with ASC 220-10, “Reporting Comprehensive Income,” (“ASC 220-10”) establishes standards for reporting and displaying of comprehensive income, its components and accumulated balances. Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, ASC 220-10 requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. At October 31, 2014 and April 30, 2014, the Company has no items of other comprehensive income.

Segment Information

The Company adopted ASC 280-10 “Disclosures about Segments of an Enterprise and Related Information,” “ASC 208-10”).  ASC 280-10 establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in consolidated financial reports issued to stockholders.  ASC 280-10 also establishes standards for related disclosures about products and services and geographic areas.  Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision making group, in making decisions how to allocate resources and assess performance.  The information disclosed herein, materially represents all of the financial information related to the Company's principal operating segments.

In the second quarter of fiscal 2013, the Company’s Board of Directors approved management’s recommendation to discontinue the Company’s consumer lease and loan lines of business and the sale of all of the Company’s portfolio of performing RISCs and a portion of its portfolio of leases. The sale was consummated in that quarter. The assets and liabilities have been accounted for as discontinued operations in the Company’s consolidated balance sheets for all periods presented. The operating results related to these lines of business have been included in discontinued operations in the Company’s consolidated statements of loss for all periods presented. As these lines of business were discontinued during the fiscal year ending April 30, 2013, the Company has discontinued segment reporting.

Stock Based Compensation

The Company adopted ASC 718-10, “Compensation-Stock Compensation Overall” (“ASC 718-10”), which records compensation expense on a straight-line basis, generally over the explicit service period of three to five years.

ASC 718-10 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s Consolidated Statement of Operations. The Company is using the Black-Scholes option-pricing model as its method of valuation for share-based awards. The Company’s determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to the Company’s expected stock price volatility over the term of the awards, and certain other market variables such as the risk free interest rate.

Concentrations of Credit Risk

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash, cash equivalents and receivables. The Company places its cash and temporary cash investments with high credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit.

10

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2014

Property and Equipment

Property and equipment are recorded at cost. Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful lives. Depreciation is calculated using the straight-line method over the estimated useful lives. Estimated useful lives of major depreciable assets are as follows:

Leasehold improvements	3 years
Furniture and fixtures	7 years
Website costs	3 years
Computer Equipment	5 years

Advertising Costs

The Company follows a policy of charging the costs of advertising to expenses incurred. During the six months ended October 31, 2014 and 2013, the Company incurred advertising costs of $3,819 and $8,500, respectively. During the three months ended October 31, 2014 and 2013, the Company incurred advertising expenses of zero and $4,250, respectively.

Net Loss Per Share

The Company uses ASC 260-10, “Earnings Per Share,” for calculating the basic and diluted loss per share. The Company computes basic loss per share by dividing net loss and net loss attributable to common shareholders by the weighted average number of common shares outstanding. Common equivalent shares are excluded from the computation of net loss per share if their effect is anti-dilutive.

Per share basic and diluted net loss attributable to common stockholders amounted to $0.05 and $0.05 for the three months ended October 31, 2014 and 2013, respectively, and $0.07 and $0.08 for the six months ended October 31, 2014 and 2013, respectively. At October 31, 2014 and 2013, 8,789,459 and 5,586,766 potential shares, respectively, were excluded from the shares used to calculate diluted earnings per share as their inclusion would reduce net loss per share.

Liquidity

As shown in the accompanying unaudited condensed consolidated financial statements, the Company has incurred a net loss attributed to common stockholders of $1,662,735 and $1,237,064 during the six months ended October 31, 2014 and October 31, 2013, respectively. The Company’s liabilities exceed its assets by $4,513,411 as of October 31, 2014.

Reclassifications

Certain reclassifications have been made to conform to prior periods' data to the current presentation. These reclassifications had no effect on reported losses.

Recent Accounting Pronouncements

There were various updates recently issued, most of which represented technical corrections to the accounting literature or applications to specific industries and are not expected to have a material impact on the Company’s unaudited condensed consolidated financial position, results of operations or cash flows.

11

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2014

NOTE B – PROPERTY AND EQUIPMENT

Major classes of property and equipment at October 31, 2014 and April 30, 2014 consist of the followings:

	October 31, 2014			April 30, 2014
Computer equipment, software and furniture	$	209,341		$	209,341
Less: accumulated depreciation		(201,160	)		(199,367	)
Net property and equipment	$	8,181		$	9,974

Depreciation expense of continuing operations for property and equipment was $1,793 and $2,778, respectively for the six months ended October 31, 2014 and 2013 and $897 and $357, respectively for the three months ended October 31, 2014 and 2013.

NOTE C – DISCONTINUED OPERATIONS

In the second quarter of fiscal 2013, the Company’s Board of Directors approved management’s recommendation to discontinue the Company’s consumer lease and loan lines of business and the sale of all of the Company’s portfolio of performing RISCs and a portion of its portfolio of leases. The sale was consummated in that quarter. The assets and liabilities have been accounted for as discontinued operations in the Company’s consolidated balance sheets for all periods presented. 

The operating results related to these lines of business have been included in discontinued operations in the Company’s consolidated statements of loss for all periods presented. The following table presents summarized operating results for those discontinued operations.

	Six Months Ended
	October 31,			October 31,
	2014			2013
Revenues	$	23,163		$	58,997
Net (loss)	$	(111,017	)	$	(278,613	)

As the Company sold all of its portfolio of performing RISCs, and a portion of its portfolio of leases with the remaining leases in final run-off mode, therefore there no portfolio performance measures were calculated for the six months ended October 31, 3014 or the year ending April 30, 2014.

ASSETS INCLUDED IN DISCONTINUED OPERATIONS

MOTORCYCLES AND OTHER VEHICLES UNDER OPERATING LEASES

Motorcycles and other vehicles under operating leases at October 31, 2014 and April 30, 2014:

	October 31,			April 30,
	2014			2014
Motorcycles and other vehicles	$	33,518		$	60,686
Less: accumulated depreciation		(3,525	)		(3,986	)
Motorcycles and other vehicles, net of accumulated depreciation		29,992			56,700
Less: estimated reserve for residual values		(957	)		(1,030	)
Motorcycles and other vehicles under operating leases, net	$	29,036		$	55,670

At April 30, 2014, motorcycles and other vehicles are being depreciated to their estimated residual values over the lives of their lease contracts. Depreciation expense for vehicles for the six months ended October 31, 2014 was $10,902 and for the year ended April 30, 2014, it was $29,411. All of the assets are pledged as collateral for the note described in SECURED NOTES PAYABLE in this Note C.  These remaining leases are in a run-off mode.

12

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2014

INVENTORY

Inventory is comprised of repossessed vehicles and vehicles which have been returned at the end of their lease. Inventory is carried at the lower of depreciated cost or market, applied on a specific identification basis. At October 31, 2014 and at April 30, 2014, the Company had no repossessed vehicles which are held for resale.

RETAIL (RISC) LOAN RECEIVABLES

All of the Company’s RISC performing loan receivables were sold in August 2013.  As of October 31, 2014 and April 30, 2014, the Company had: RISC loans of $19,016 and $20,345, respectively, and deficiency receivables of $3,395 and $0, respectively. At October 31, 2014 and at April 30, 2014, the reserve for doubtful RISC loan receivables was $2,500 and $1,124, respectively.

As the Company sold all of its portfolio of RISCs, and a portion of its portfolio of leases with the remaining leases in final run-off mode, therefore there no portfolio performance measures were calculated for the quarter or six months ending October 31, 2014 or the year ending April 30, 2014.

LIABILITIES INCLUDED IN DISCONTINUED OPERATIONS

SECURED NOTES PAYABLE

	October 31,		April 30,
	2014		2014
Secured, subordinated  individual lender (a)	$	85,385	$	117,508
Secured, subordinated individual lender (b)		12,080		12,912
Total	$	97,465	$	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 October 31, 2014 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 October 31, 2014, 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. The Company was obligated to pay any remainder of the Senior Secured Note by November 1, 2009 which was extended to May 1, 2014, and has granted the note holder a security interest in the Purchased Portfolio. On January 31, 2014, the holder converted $50,000 of the outstanding balance of the Note into 60,606 shares of the Company’s restricted common stock. The note, which had an outstanding balance of $12,080 at October 31, 2014, has been extended to August 31, 2015. 

At October 31, 2014, the notes payable mature as follows:

Year ended October 31,	Amount
2015	$	97,465
Total Due	$	97,465

13

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2014

NOTE D – NOTES PAYABLE

Notes Payable	October 31, 2014			April 30, 2014
Notes convertible at holder’s option (a)	$	2,167,358		$	1,901,263
Notes with interest only convertible at Company’s option (b)		390,000			390,000
Non-convertible notes payable (c)		180,000			25,000
Subtotal		2,737,357			2,316,263
Less, Debt discount		(366,434	)		(296,384	)
Total	$	2,370,923		$	2,019,879

 (a) Notes convertible at holder’s option consists of:

(i)                             a $1,258,368, 8% note originally due April 30, 2013, but subsequently amended to such time as the law suit filed by the Company (see: PART II, ITEM 1 LEGAL PROCEEDINGS) is fully adjudicated, convertible at the holder’s option at $0.495 per share. In fiscal 2012, the Company had recorded a $663,403 beneficial conversion discount for this note which was fully amortized during fiscal 2013; 

(ii)                            a $56,500, 6% note due June 30, 2015. The Company has recorded beneficial conversion discounts totaling $56,500 for the note. The discount is being fully amortized over the terms of the note.   The note is 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”). The Company had reserved up to 1,356,993 shares of its common stock for conversion pursuant to the terms of the note.  In the event the note is not paid when due, the interest rate is increased to eighteen percent until the note is paid in full;

(iii)                           a $25,000, 12% convertible note due May 27, 2014. The note is convertible at $0.59 per share. If the Company has not redeemed the outstanding principal and accrued interest of this Debenture in cash by the Maturity Date and the original Debenture between the Holder and the Company dated September 19, 2007 is no longer outstanding for every 30 day period past the Maturity Date of which the principal balance an any accrued interest of this Debenture remain outstanding, the Company shall issue the Holder the greater of (i) 1,333 shares of the Company’s restricted common stock or (ii) the number of shares of the Company’s restricted common stock equal to $2,000 determined on the basis of the volume weighted average closing price “VWACP” of the Company’s common stock for the five consecutive trading days immediately prior to the 19th of each month (for a day to be included in the calculation, there must have been at least 100 shares traded on that day). As long as the Company remains current on the payment of the shares under this Paragraph 12, the Debenture shall be considered past due but not in default. The Company issued the holder 5,000 shares of its restricted common stock as inducement for the loan and a $50,000, 12% note, due March 20, 2015, convertible at the holder’s option at $0.59 per share), the Company issued the holder 10,000 shares of its restricted common stock as inducement for the loan. In fiscal 2012, the Company has recorded a $50,000 beneficial conversion discount for this note. The discount is being fully amortized over the term of the note;

(iv)                           seven notes aggregating $118,250, all due August 15, 2015 with interest ranging from 15% to 20%, with accrued interest compounding monthly at 8%, the Company is paying 667 monthly penalty shares until the note is paid in full on one $25,000 note which had been past due, all of the notes are convertible at the holder’s option at $0.25 per share. In fiscal 2012, the Company has recorded a $5,340 beneficial conversion discount for these notes. The discount is being fully amortized over the term of the notes; 

(v)                            three notes aggregating $106,250, all due August 15, 2015 with interest ranging from 20% to 25% with accrued interest compounding monthly at 8%, all of the notes are convertible at the holder’s option at $0.25 per share.  In fiscal 2012, the Company has recorded a $6,120 beneficial conversion discount for these notes. The discount is being fully amortized over the term of the notes;  

14

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2014

(vi)                           a $59,000, 5% convertible note due April 16, 2015. This lender has committed to lend up to $330,000 (three hundred thousand) in the form of a $165,000 note. 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 borrower is only required to repay the amount funded and the Company is not required to repay any unfunded portion of this note. The second note has been amended to include a 3% closing fee on the amount of each sum advanced plus a 5% due diligence fee on the amount of each sum advanced. The combined fees shall be added to the sum advanced for all purposes under the Note, including when calculating the amount of the interest charge. The maturity date 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 is the lesser of $1.20 or 70% of the average of the three lowest closing prices during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company (In the case that conversion shares are not deliverable by DWAC an additional 5% discount will apply; and if the shares are chilled for deposit into the DTC system and only eligible for Xclearing deposit an additional 7.5% discount shall apply).  Unless otherwise agreed in writing by both parties, at no time will the lender convert any amount of this note into common stock that would result in the lender owning more than 4.99% of the common stock outstanding. In fiscal 2014, the Company has recorded a $39,784 beneficial conversion discount for the note. The discount is being fully amortized over the initial term of the note;

(vii)                          a $13,720 outstanding balance of a  $27,500, 5% convertible note due October 21, 2014,  a $27,500, 5% convertible note due January 28, 2015 and a $27,500, 5% convertible note due April 29, 2015. This lender has committed to lend up to $165,000. 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 borrower 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 previous to the day the conversion notice is delivered to the Company. (In the case that conversion shares are not deliverable by DWAC, the principal amount of the note shall be increased by $10,000, and the conversion price shall be redefined to equal the lesser of (a) $0.60 or (b) 50% of the lowest closing price during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company).  Unless otherwise agreed in writing by both parties, at no time will the lender convert any amount of this note into common stock that would result in the lender owning more than 4.99% of the common stock outstanding. In fiscal 2014, the Company has recorded a $49,085 beneficial conversion discount for the notes. The discounts are being fully amortized over the terms of the notes; $500 outstanding balance on a $13,900, and 10% convertible note due June 1, 2014. The Conversion Price for this note is the lesser of $0.50 or 70% of the lowest closing prices during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company. (In the case that conversion shares are not deliverable by DWAC, the principal amount of the note shall be increased by $15,000, and the conversion price shall be redefined to equal the lesser of (a) $0.005 or (b) 50% of the lowest closing prices during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company). In fiscal 2014, the Company has recorded an $11,158 beneficial conversion discount for the note. The discount is being fully amortized over the term of the note; and $625 outstanding balance on a $60,000, 12% convertible note due March 20, 2015. The Conversion Price for this note is 65% of the lowest closing price during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company. (In the case that conversion shares are not deliverable by DWAC, the principal amount of the note shall be increased by $15,000, and the conversion price shall be redefined to equal the lesser of (a) $0.005 or (b) 50% of the lowest closing price during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company). In fiscal 2014, the Company has recorded a $32,309 beneficial conversion discount for the note. The discount is being fully amortized over the term of the note;  

(viii)                         a $55,000 8% convertible note due February 25, 2015 and a $55,000 convertible note due April 27, 2015. Both notes are convertible at a 40% discount from the lowest closing price for the twenty trading days prior to conversion. The Company has recorded a $99,161 beneficial conversion discount for the two notes. The discount is being fully amortized over the initial term of the notes. The Company had reserved up to 918,000 shares of its common stock for conversion pursuant to the terms of the notes.  In the event the note is not paid when due, the interest rate is increased to fifteen percent until the notes are paid in full; 

15

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2014

(ix)                           a $42,500, 8% note due February 2, 2015, $37,500, 8% note due April 27, 2015, a$32,500, 8% note due June 3, 2015 and a $33,000, 8% note due July 14, 2015. The Company has recorded a beneficial conversion discount of $114,215 for the notes. The discount is being fully amortized over the term of the notes.   The 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”). The Company had reserved up to 2,900,000 shares of its common stock for conversion pursuant to the terms of the note.  In the event the note is not paid when due, the interest rate is increased to twenty-two percent until the note is paid in full;

(x)                             a $20,000 outstanding balance of a $40,000, 6% note due April 3, 2015. In fiscal 2014, the Company has recorded a beneficial conversion discount of $20,085 for the note. The discount is being fully amortized over the term of the note.   The note is convertible at the note holder’s option at the lesser of $1.20 or a variable conversion of 65% multiplied by the lowest VWAP in the five 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”). The Company had reserved up to 310,000 shares of its common stock for conversion pursuant to the terms of the note.  In the event the note is not paid when due, the interest rate is increased to twenty-two percent until the note is paid in full; and

(xi)                            a $44,770, 5% note due April 15, 2016. In fiscal 2014, the Company has recorded a beneficial conversion discount of $35,816 for the note. The discount is being fully amortized over the term of the note.   The note is convertible at the note holder’s option at the rate of 1.5 shares of common stock for each dollar converted.  In the event the note is not paid when due, the interest rate is increased to eighteen percent until the note is paid in full; and

(xii)                           a $50,000, 8% note due December 20, 2014. The Company has recorded a beneficial conversion discount of $36,207 for the note. The discount is being fully amortized over the term of the note.   The note is convertible at the note holder’s option at  a variable conversion of 58% multiplied by the average of three lowest trades 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”). The Company had reserved up to 340,000 shares of its common stock for conversion pursuant to the terms of the note, and a $55,000, 12% note due February 19, 2015. The Company has recorded a beneficial conversion discount of $48,015 for the note. The discount is being fully amortized over the term of the note.   The note is convertible at the note holder’s option at  a variable conversion of 58% multiplied by the average of the three lowest trades 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”). The Company had reserved up to 325,000 shares of its common stock for conversion pursuant to the terms of the note.

(b) Notes with interest only convertible at Company’s option consist of:

 (i)                            a 22% note in the amount of $10,000 due May 31, 2015;

 (ii)                           a $25,000 note due May 1, 2011, which was extended to October 31, 2013. The Company is paying the note holder 3,333 shares per month until the note is paid or renegotiated. So long as the Company pays the monthly shares this note is not in default. Interest is payable on the $10,000 note at the Company’s option and on the $25,000 note at the holder’s option in cash or in shares at the rate of $1.50 per share;

(iii)                           a $315,000, 12.462% note due April 30, 2014, but subsequently amended to such time as the law suit filed by the Company (see: PART II, ITEM 1 LEGAL PROCEEDINGS) is fully adjudicated. Interest is payable quarterly with a minimum or $600 in cash with the balance payable in cash or stock at the Company’s options calculated as the volume weighted average price of the Company’s common stock for the ten day trading period immediately preceding the last day of each three month period;

(iv)                           a $25,000 8% note due May 31, 2015, the Company issued the note holder 5,000 shares of its common stock in connection with this loan Pursuant to the terms of this note, the Company is required to issue to the note holder 5,000 shares of its common stock for each month or portion thereof that the note remains unpaid. Interest is payable on all this note at the Company’s option in cash or in shares at the rate of $0.35 per share; and a

(v)                            $15,000 5% note due May 31, 2015, the Company agreed to issue the note holder 5,000 shares of its common stock in connection with this loan.

16

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2014

(c) Non-convertible notes consist of:

     (i)                            a $25,000 note due May 31, 2015 which bears no interest. Pursuant to the terms of this note, the Company is required to issue to the note holder 1,000 shares of its common stock for each month or portion thereof that the note remains unpaid;

     (ii)                           a $75,000, 20% note due March 18, 2015. The note is secured by 640,197 shares of the Company’s restricted common stock. The Company issued this Noteholder 106,700 shares of restricted common stock as inducement for the loan; and

 (iii)                          two $20,000, 8% notes due January 5, 2015. The notes are secured by a $37,401 security deposit. In case of default the interest rate is increased to eighteen percent and the Company shall issue each noteholder 10,000 shares of its restricted common stock for every ten day period the notes remain unpaid.

(iv)                           a $40,000, 8% note due December 31, 2014. The Company agreed to issue 10,000 shares of restricted common stock as an inducement for the loan.

Amortization of Beneficial Conversion Feature for the six months ended October 31, 2014 and 2013 was $314,065 and $195,942, respectively and for the fiscal year ended April 30, 2014 was $417,291.

The Company's derivative financial instruments consist of embedded derivatives related to the outstanding short term Convertible Notes Payable. These embedded derivatives include certain conversion features indexed to the Company's common stock. The accounting treatment of derivative financial instruments requires that the Company record the derivatives and related items at their fair values as of the inception date of the Convertible Notes Payable and at fair value as of each subsequent balance sheet date. In addition, under the provisions of Accounting Standards Codification subtopic 815-40, Derivatives and Hedging; Contracts in Entity's Own Equity ("ASC 815-40"), as a result of entering into the Convertible Notes Payable, the Company is required to classify all other non-employee stock options and warrants as derivative liabilities and mark them to market at each reporting date. Any change in fair value inclusive of modifications of terms will be recorded as non-operating, non-cash income or expense at each reporting date. If the fair value of the derivatives is higher at the subsequent balance sheet date, the Company will record a non-operating, non-cash charge. If the fair value of the derivatives is lower at the subsequent balance sheet date, the Company will record non-operating, non-cash income.

Derivative liabilities related to notes payable increased by a net of $221,450 during the six months ended October 31, 2014 to $583,800.  $81,821 of this amount was charged to additional-paid-in-capital upon payoff or full conversion of notes payable. Derivative liabilities related to outstanding warrants decreased by a net of $66,878 during the six months ended October 31, 2014 to $171,771.

The change in fair value of the derivative liabilities of warrants outstanding at October 31, 2014 was calculated with the following average assumptions, using a Black-Scholes option pricing model are as follows:

Significant Assumptions:
Risk free interest rate	Ranging from	0.15	%	to	1.02	%
Expected stock price volatility					140	%
Expected dividend payout					0
Expected options life in years	Ranging from	.15	year	to	3.17	years

The change in fair value of the derivative liabilities of convertible notes outstanding at October 31, 2014 was calculated with the following average assumptions, using a Black-Scholes option pricing model are as follows:

Significant Assumptions:
Risk free interest rate	Ranging from	0.039	%	to	0.074	%
Expected stock price volatility					140	%
Expected dividend payout					0
Expected options life in years	Ranging from	.22	year	to	.9	year

17

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2014

The value of the derivative liability was re-assessed as of October 31, 2014 resulting in a gain to the consolidated statement of operations of $8,704 for the six months ended October31, 2014 and a loss to the consolidated statement of operations of $203,825 for the three months ended October 31, 2014.

	October 31, 2014
Opening balance, April 30, 2014	$	601,000
Derivative liability reclassified to additional paid in capital		(81,821	)
Derivative financial liability arising on the issue of convertible notes		465,047
Fair value adjustments		(228,655	)
Closing balance	$	755,571

NOTE E – LOANS PAYABLE TO RELATED PARTIES

As of October 31, 2014 and April 30, 2014, aggregated loans payable, without demand and with no interest, to officers and directors were $385,853 and $385,853, respectively. 

NOTE F – EQUITY TRANSACTIONS

On May 18, 2013, the Company’s Board of Directors declared effective a one for seventy-five reverse common stock split. All per share amounts in these unaudited condensed consolidated financial statements and accompanying notes have been retroactively adjusted to the earliest period presented for the effect of this reverse stock split.

The Company is authorized to issue 10,000,000 shares of preferred stock with $0.001 par value per share, of which 35,850 shares have been designated as Series A convertible preferred stock with a $100 stated value per share, 1,000 shares have been designated as Series B Preferred Stock with a $10,000 per share liquidation value, and 200,000 shares have been designated as Series C Preferred Stock with a $10 per share liquidation value, and 740,000,000 shares of common stock with $0.001 par value per share.  The Company had 125 shares of Series A preferred stock issued and outstanding as of October 31, 2014 and April 30, 2014.  The Company had 67 and 157 shares of Series B preferred stock issued and outstanding as of October 31, 2014 and April 30, 2014 respectively.  The Company had nil shares of Series C preferred stock issued and outstanding as of October 31, 2014 and April 30, 2014.  The Company has 24,397,250 and 20,987,353 shares of common stock issued and outstanding as of October 31, 2014 and April 30, 2014, respectively.

Preferred Stock, Series A

During the six months ended October 31, 2014, there were no transactions in Series A Preferred, however, at October 31, 2014, there were $7,186 of accrued dividends payable on the Series A Preferred, compared to the accrual of $6,803 at April 30, 2014.  At the Company’s option, these dividends may be paid in shares of the Company’s Common Stock.

Preferred Stock, Series B

During the six months ended October 31, 2014, pursuant to the terms of the Series B Preferred Stock, the Company redeemed 90 shares of Series B Preferred Stock and 43.11 shares of to be issued Series B Preferred Stock by exchanging the shares for $1,215,000 of note subscription receivables and $116,107 of interest receivable thereon. Subsequent to this redemption there were 67 shares of Series B Preferred Stock outstanding and there were 29.37 shares of Series B Preferred Stock payable.

Preferred Stock Series C

There were no shares of Series C Preferred Stock issued and outstanding at October 31, 2014 and at April 30, 2014.

Common Stock

During the six months ended October 31, 2014, the Company expensed $204,388 for non-cash charges related to stock and option compensation expense.

18

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2014

During the six months ended October 31, 2014, the Company:

●  sold 2,038,519 shares of common stock to eighteen accredited investors for $497,479, of which 185,900 shares remained to be issued at October 31, 2014 and 101,877 shares were classified as to be issued at April 30, 2014,

●  issued 888,365 shares of common stock upon the conversion of convertible notes and accrued interest in the amount of $325,463, of which 122,451 shares were classified as to be issued at April 30, 2014 and 153,910 shares remained to be issued at October 31, 2014,

●  issued 207,787 shares of common stock valued at $60,619 pursuant to terms of various notes of which 60,000 shares remained to be issued at October 31, 2014, and issued 16,666 shares were classified as to be issued at April 30, 2014.,

● issued 240,109 shares of common stock valued at $126,928 pursuant to consulting agreements,

● issued 138,160 shares of common stock in payment of $47,064 in accounts payable of which 20,000 shares were classified as to be issued at April 30, 2014, and

● issued 31,780 shares of common stock valued at $14,269 to three employees in exchange for their outstanding stock purchase options.

NOTE G – NONCONTROLLING INTEREST

For the six months ended October 31, 2014, the non-controlling interest is summarized as follows:

	Amount
Balance at April 30, 2014	$	669,424
Noncontrolling interest’s share of losses		(19,251	)
Balance at October 31, 2014	$	650,173

NOTE H – FAIR VALUE MEASUREMENTS

The Company follows the guidance established pursuant to ASC 820 which established a framework for measuring fair value and expands disclosure about fair value measurements. ASC 820 defines fair value as the amount that would be received for an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes the following three levels of inputs that may be used:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets and liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data.

Level 3: Unobservable inputs when there is little or no market data available, thereby requiring an entity to develop its own assumptions. The fair value hierarchy gives the lowest priority to Level 3 inputs.

The table below summarizes the fair values of financial liabilities as of October 31, 2014:

			Fair Value Measurement Using
	Fair Value at  October 31,  2014		Level 1		Level 2		Level 3
Derivative liabilities	$	755,571		-		-	$	755,571

The following is a description of the valuation methodologies used for these items:

Derivative liability — these instruments consist of certain variable conversion features related to notes payable obligations and certain outstanding warrants. These instruments were valued using pricing models which incorporate the Company’s stock price, volatility, U.S. risk free rate, dividend rate and estimated life.

The Company did not identify any other non-recurring assets and liabilities that are required to be presented in the balance sheets at fair value in accordance with ASC Topic 825 “The Fair Value Option for Financial Issuances”.

19

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2014

Changes in Derivative liability during the six months ended October 31, 2014 were:

			Increased		Decrease
	April 30,		During		in Fair		October 31,
	2014		Period		Value		2014
Derivative liability	$	601,000	$	465,047	$	310,476	$	755,571
Total	$	601,000	$	465,047	$	310,476	$	755,571

NOTE I – NON-CASH FINANCIAL INFORMATION

During the six months ended October 31, 2014, the Company:

●  issued 888,365 shares of common stock upon the conversion of  convertible notes and accrued interest in the amount of $325,463, of which 122,451 shares were classified as to be issued at April 30, 2014 and 153,910 shares remained to be issued at October 31, 2014,

●  issued 156,644 shares of common stock valued at $60,619 pursuant to terms of various notes of which 16,666 were classified as to be issued at April 30, 2014 and 60,000 shares remained to be issued at October 31, 2014, and

● issued 138,160 shares of common stock in payment of $47,064 in accounts payable of which 20,000 shares were classified as to be issued at April 30, 2014.

NOTE J – SUBSEQUENT EVENTS

During November and through December 19, 2014, the Company:

Issued 605,179 shares of common stock upon the conversion of $76,020 of notes and accrued interest thereon.

· Sold 1,193,288 shares of common stock to four accredited investors for $123,400.

· Issued 123,813 shares valued at $20,567 pursuant to the terms of notes.

·   Issued 362,000 shares of common stock valued at $109,990 to a consultant.

·   Issued 211,682 shares listed as to be issued at October 31, 2014.

·   Borrowed pursuant to a $55,125, 8% note due December 12, 2015.  The note is convertible at the note holder’s option at  a variable conversion of 60% multiplied by the average of the three closing prices in the fifteen 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. This lender has committed to lend the Company an additional $52,500 under the same terms on or before August 9, 2015 so long as the Company continues to meet the current information requirements under Rule 144 of the Securities Act of 1933, as amended.

·   Borrowed pursuant to a $33,000, 8% note due August 19, 2015. The note is convertible at the note holder’s option at a variable conversion price of 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”).

·   Borrowed $55,000 pursuant to a $220,000, 10% note due November 24, 2015. The note holder has the right but not the obligation, subject to the Company’s agreement, to advance the remaining $165,000 balance of the note on or before the due date. The note is convertible at the note holder’s option at a variable conversion prices of 58% multiplied by the lowest closing price for the common stock during the five 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”).

Borrowed $65,000 pursuant to a $100,000, 8% secured note due July 31, 2016, and re-classed $35,000 of existing debt due this note holder into this note. The Company issued this note holder 100,000 shares of common stock as inducement for this loan. The note is secured by a $76,610 security deposit.

20

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2014

NOTE K– GOING CONCERN MATTERS

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  As shown in the accompanying unaudited condensed consolidated financial statements during the period July 1, 2004 (date of inception) through October 31, 2014, the Company incurred loss of $45,920,041.  Of these losses, $1,662,735 was incurred in the six months ending October 31, 2014.  These factors among others may indicate that the Company will be unable to continue as a going concern for a reasonable period of time.

The Company’s existence is dependent upon management’s ability to develop profitable operations.  Management is devoting substantially all of its efforts to developing its business and raising capital and there can be no assurance that the Company’s efforts will be successful.  However, there can be no assurance can be given that management’s actions will result in profitable operations or the resolution of its liquidity problems.  The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

In order to improve the Company’s liquidity, the Company’s management is actively pursuing additional equity financing through discussions with investment bankers and private investors.  There can be no assurance the Company will be successful in its effort to secure additional equity financing.

21

ITEM 2.                MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

The following discussion of our financial condition and results of operations should be read in conjunction with (1) our interim unaudited financial statements and their explanatory notes included as part of this quarterly report, and (2) our annual audited financial statements and explanatory notes for the year ended April 30, 2014 as disclosed in our annual report on Form 10-K for that year as filed with the SEC.

“Forward-Looking” Information

This report on Form 10-Q contains certain “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, which represent our expectations and beliefs, including, but not limited to statements concerning the Company’s expected growth. The words “believe,” “expect,” “anticipate,” “estimate,” “project,” and similar expressions identify forward-looking statements, which speak only as of the date such statement was made. These statements by their nature involve substantial risks and uncertainties, certain of which are beyond our control, and actual results may differ materially depending on a variety of important factors.

RESULTS OF OPERATIONS

Comparison of the Three Months Ended October 31, 2014 to the Three Months Ended October 31, 2013

For the three months ended October 31, 2014 and 2013, we have generated limited sales revenues, have incurred significant expenses, and have sustained significant losses.

Discontinued Operations

As discussed in NOTE C to the consolidated financial statements, in August 2012, the Company’s Board of Directors approved management’s recommendation to discontinue the Company’s consumer lease and loan lines of business and the sale of all of the Company’s portfolio of performing RISCs, and a portion of its portfolio of leases. The sale was consummated in that quarter. The assets and liabilities have been accounted for as discontinued operations in the Company’s consolidated balance sheets for all periods presented.

The operating results related to these lines of business have been included in discontinued operations in the Company’s consolidated statements of loss for all periods presented. The following table presents summarized operating results for those discontinued operations.

	Quarter Ended
	October 31,			October 31,
	2014			2013
Revenues	$	11,297		$	37,986
Net (loss)	$	(16,653	)	$	(267,992	)

RESULTS OF CONTINUING OPERATIONS

Revenues

Revenues totaled $138,074during the three months ended October 31, 2014 as compared to $118,047 during the three months ended October 31, 2013. This $20,026 or 16.9% increase was due to increased sales of mobile apps.

Costs and Expenses

General and administrative expenses were $685,680 during the three months ended October 31, 2014, compared to $363,382  during the three months ended October 31, 2013, an increase of $322,298 or 88.7% primarily due to run down of discontinued operations and reallocation of the majority of these expenses to continuing operations. Expenses incurred during the current three month period consisted primarily of the following expenses: Compensation and related costs,$302,538; General and administrative expenses of $63,633; Accounting, audit and professional fees, $32,920; Consulting fees, $69,488; Rent, utilities and telecommunication expenses $67,571; Travel and entertainment, $10,912;  stock and option based compensation, $121,529; advertising, marketing and web expenses, $12,801; and taxes, $4,288. Expenses incurred during the comparative three month period in 2013 consisted primarily of the following expenses: Compensation and related costs, $150,076; Accounting, audit and professional fees, $29,565; Consulting fees, $81,284; Rent, utilities and telecommunication expenses $32,387; Travel and entertainment, $12,995; stock and option based compensation, $37,017; advertising, marketing and web expenses , $11,060 and taxes, $3,125. 

22

Net Loss

We incurred a net loss from continuing operations, before preferred dividends and non-controlling interest of $1,144,922 for the three months ended October 31, 2014 as compared to $447,850 for the corresponding interim period in 2013, a $697,071 or 155.6% increase. This increase was attributable primarily to: a $12,680, 71.7% decline in other income; a $332,839 or 88.8% increase in general and administrative expenses as described above; a $231,299 or 844% change of fair value of derivative liabilities; a $71,721 or 81.42% increase in interest expense and financing costs, net; and a $68,873 or 57.2% increase in the amortization of debt discount. Our net loss attributable to common stockholders increased to $1,154,306 for the three month period ended October 31, 2014 as compared to $737,302 for the corresponding period in 2013. The $417,004 or 56.6% increase in net loss attributable to common stockholders for the three month period ended October 31, 2014 was due primarily to the factors described above and a $251,339 or 93.8% decrease in the net loss from discontinued operations.

Comparison of the Six Months Ended October 31, 2014 to the Six Months Ended October 31, 2013

Discontinued Operations

As discussed in NOTE C to the consolidated financial statements, in August 2012, the Company’s Board of Directors approved management’s recommendation to discontinue the Company’s consumer lease and loan lines of business and the sale of all of the Company’s portfolio of performing RISCs, and a portion of its portfolio of leases. The sale was consummated in that quarter. The assets and liabilities have been accounted for as discontinued operations in the Company’s consolidated balance sheets for all periods presented.

The operating results related to these lines of business have been included in discontinued operations in the Company’s consolidated statements of loss for all periods presented. The following table presents summarized operating results for those discontinued operations.

	Six Months Ended
	October 31,			October 31,
	2014			2013
Revenues	$	23,163		$	58,997
Net (loss)	$	(111,017	)	$	(278,613	)

For the six months ended October 31, 2014 and 2013, we have generated limited sales revenues, have incurred significant expenses, and have sustained significant losses.

RESULTS OF CONTINUING OPERATIONS

Revenues

Revenues totaled $270,881during the six months ended October 31, 2014 as compared to $254,164 during the six months ended October 31, 2013.  This $16,717 or 6.6% increase was due to increased sales of mobile apps.

Costs and Expenses

General and administrative expenses were $1,217,394 during the six months ended October 31, 2014, compared to $711,829  during the six months ended October 31, 2013, an increase of $505,565, or 71.0% primarily due to run down of discontinued operations and reallocation of the majority of these expenses to continuing operations. Expenses incurred during the current six month period consisted primarily of the following expenses: Compensation and related costs, $552,114; Accounting, audit and professional fees, $104,382; Consulting fees, $104,180; Rent, utilities and telecommunication expenses $99,074; Travel and entertainment, $9,823;  stock and option based compensation, $165,316, advertising, marketing and web expenses, $26,212, and taxes, $7,030. Expenses incurred during the comparative six month period in 2013 consisted primarily of the following expenses:  Compensation and related costs, $303,437; Accounting, audit and professional fees, $59,777; Consulting fees, $82,174; Rent, utilities and telecommunication expenses $65,482; Travel and entertainment, $13,137; stock and option based compensation, $119,037; advertising, marketing and web expenses, $23,363, and taxes, $6,318. For the six months ended October 31, 2014 and October 31, 2013, we incurred non-cash charges of $68,051 and $196,447, respectively related to shares of common stock and warrants issued for financing cost. For the six months ended October 31, 2014 and October 31, 2013, we incurred a non- cash charge of $26,720 and a non-cash credit of $113,106, respectively related to the change in fair value of derivative liabilities. Amortization of debt discount for the six months ended October 31, 2014 was $195,942 compared to $377,296 for the six months ended October 31, 2013.

23

Net Loss

We incurred a net loss from continuing operations before preferred dividends and non-controlling interest of $1,570,586for our six months ended October 31, 2014 as compared to $907,321 for the corresponding interim period in 2013. The $663,265 or 73.1.3% increase in our net loss from continuing operations before preferred dividends and non-controlling interest for our six month interim period ended October 31, 2014 was attributable primarily to the: $16,717 or 6.6% increase in revenues; $22,416, 58.7% decline in other income; the $504,581, 70.6% increase in operating expenses;  the $60,530, 32.5% increase in interest expense and financing costs, net; the $118,123, 60.3% increase in amortization of debt discount; and a $35,423, 132.6% decrease in the loss due to change in fair value of derivative liability. We also incurred non-cash preferred dividend expense of $382 and $79,527, respectively for our six month periods ended October 31, 2014 and 2013. Additionally, the net loss attributed to non-controlling interest decreased $8,718, 31.2% to $19,251 in the current six months from $27,969 in the six months ended October 31, 2013.

Our net loss attributable to common stockholders increased to $1,662,735 for our six month period ended October 31, 2014 as compared to $1,237,064 for the corresponding period in 2013. The $425,671, 34.4% increase in net loss attributable to common stockholders for our six month period ended October 31, 2014 was due to the factors described above.

LIQUIDITY AND CAPITAL RESOURCES

As of October 31, 2014, we had a deficit net worth of $4,513,411. We generated a deficit in cash flow from operations of $1,108,714 the six months ended October 31, 2014. This deficit is primarily attributable to our net loss from operations of $1,662,735 which included: $314,065 for amortization of debt discount; depreciation of $1,793; the value of shares issued for compensation of $204,386; shares issued for finance of $60,619; shares issued for interest and accounts payable of $127,304; and preferred dividends of $382;  all off-set by the $19,251 loss allocable to non-controlling interest, an $98,442 increase in accounts receivable;  and an increase of $66,505 in other assets, primarily deposits.

We met our cash requirements during the six month period as follows: through revenues generated:  net proceeds of notes and convertible notes payable of $640,000; net proceeds from the sale of common equity in the amount of $497,478. We made net payments on notes payable in the amount of $97,500.

Net cash provided by discontinued operations was $7,837.

We do not anticipate incurring significant research and development expenditures, and we do not anticipate the sale or acquisition of any significant property, plant or equipment, during the next twelve months.  At October 31, 2014, we had 13 full time employees. If we fully implement our business plan, we anticipate our employment base may increase by approximately 100% during the next twelve months. As we continue to expand, we will incur additional cost for personnel. This projected increase in personnel is dependent upon our generating revenues and obtaining sources of financing. There is no guarantee that we will be successful in raising the funds required or generating revenues sufficient to fund the projected increase in the number of employees.

While we have raised capital to meet our working capital and financing needs in the past, additional financing is required in order to meet our current and projected cash flow deficits from operations and development.

We continue seeking additional financing, which may be in the form of senior debt, subordinated debt or equity. We currently have no commitments for financing that aren’t at the investor’s election. There is no guarantee that we will be successful in raising the funds required to support our operations.

We estimate that we will need approximately $1,500,000 in addition to our normal operating cash flow to conduct operations during the next twelve months.   However, there can be no assurance that additional private or public financing, including debt or equity financing, will be available as needed, or, if available, on terms favorable to us. Any additional equity financing may be dilutive to stockholders and such additional equity securities may have rights, preferences or privileges that are senior to those of our existing common or preferred stock. Furthermore, debt financing, if available, will require payment of interest and may involve restrictive covenants that could impose limitations on our operating flexibility. However, if we are not successful in generating sufficient liquidity from operations or in raising sufficient capital resources, on terms acceptable to us, this could have a material adverse effect on our business, results of operations, liquidity and financial condition, and we will have to adjust our planned operations and development on a more limited scale.

The effect of inflation on our revenue and operating results was not significant. Our operations are located in North America and there are no seasonal aspects that would have a material effect on our financial condition or results of operations.

24

GOING CONCERN ISSUES

The independent auditors report on our April 30, 2014 and 2013 financial statements included in the Company’s Annual Report states that the Company’s historical losses and the lack of revenues raise substantial doubts about the Company’s ability to continue as a going concern, due to the losses incurred and its lack of significant operations. If we are unable to develop our business, we have to discontinue operations or cease to exist, which would be detrimental to the value of the Company’s common stock. We can make no assurances that our business operations will develop and provide us with significant cash to continue operations.

In order to improve the Company’s liquidity, the Company’s management is actively pursuing additional financing through discussions with investment bankers, financial institutions and private investors. There can be no assurance the Company will be successful in its effort to secure additional financing.

We continue to experience net operating losses. Our ability to continue as a going concern is subject to our ability to develop profitable operations. We are devoting substantially all of our efforts to developing our business and raising capital. Our net operating losses increase the difficulty in meeting such goals and there can be no assurances that such methods will prove successful.

The primary issues management will focus on in the immediate future to address this matter include: seeking additional credit facilities from institutional lenders; seeking institutional investors for debt or equity investments in our Company; short term interim debt financing: and private placements of debt and equity securities with accredited investors.

To address these issues, we have engaged a financial advisory firm to advise and assist us in negotiating and raising capital.

INFLATION

The impact of inflation on the costs of the Company, and the ability to pass on cost increases to its customers over time is dependent upon market conditions. The Company is not aware of any inflationary pressures that have had any significant impact on the Company’s operations over the past quarter, and the Company does not anticipate that inflationary factors will have a significant impact on future operations.

OFF-BALANCE SHEET ARRANGEMENTS

The Company does not maintain off-balance sheet arrangements nor does it participate in non-exchange traded contracts requiring fair value accounting treatment.

TRENDS, RISKS AND UNCERTAINTIES

We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise.

Our annual operating results may fluctuate significantly in the future as a result of a variety of factors, most of which are outside our control, including: the demand for our products and services; seasonal trends in purchasing, the amount and timing of capital expenditures and other costs relating to the commercial and consumer financing; price competition or pricing changes in the market; technical difficulties or system downtime; general economic conditions and economic conditions specific to the consumer financing sector.

Our annual results may also be significantly impacted by the impact of the accounting treatment of acquisitions, financing transactions or other matters. Particularly at our early stage of development, such accounting treatment can have a material impact on the results for any quarter. Due to the foregoing factors, among others, it is likely that our operating results may fall below our expectations or those of investors in some future quarter.

Our future performance and success is dependent upon the efforts and abilities of our management. To a very significant degree, we are dependent upon the continued services of Anthony L. Havens, our President and Chief Executive Officer and member of our Board of Directors. If we lost the services of either Mr. Havens, or other key employees before we could get qualified replacements, that loss could materially adversely affect our business. We do not maintain key man life insurance on any of our management.

Our officers and directors are required to exercise good faith and high integrity in our management affairs. Our bylaws provide, however, that our directors shall have no liability to us or to our shareholders for monetary damages for breach of fiduciary duty as a director except with respect to (1) a breach of the director’s duty of loyalty to the corporation or its stockholders, (2) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) liability which may be specifically defined by law or (4) a transaction from which the director derived an improper personal benefit.

25

The present officers and directors own approximately 5% of the outstanding shares of common stock, without giving effect to shares underlying convertible securities, and therefore are not in a position to elect all of our Directors and otherwise control the Company. However, they can authorize the sale of equity or debt securities of Sparta, the appointment of officers, and the determination of officers’ salaries. Shareholders have no cumulative voting rights.

We may experience growth, which will place a strain on our managerial, operational and financial systems resources. To accommodate our current size and manage growth if it occurs, we must devote management attention and resources to improve our financial strength and our operational systems. Further, we will need to expand, train and manage our sales and distribution base. There is no guarantee that we will be able to effectively manage our existing operations or the growth of our operations, or that our facilities, systems, procedures or controls will be adequate to support any future growth. Our ability to manage our operations and any future growth will have a material effect on our stockholders.

If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board which would limit the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.  Companies trading on the OTC Bulletin Board, such as us, must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board. If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.

CRITICAL ACCOUNTING POLICIES

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. While there are a number of significant accounting policies affecting our financial statements, we believe the following critical accounting policies involves the most complex, difficult and subjective estimates and judgments.

Revenue Recognition

Revenues from our history report and mobile apps products are recognized on a cash basis.

Our Retail Installment Sales Contracts (“RISCs”), which are included in Discontinued Operations, are secured by liens on the titles to the vehicles. The RISCs are accounted for as loans.  Upon purchase, the RISCs appear on our balance sheet as RISC loans receivable current and long term. When the RISC is entered into our accounting system, based on the customer's APR (interest rate), an amortization schedule for the loan on a simple interest basis is created. Interest is computed by taking the principal balance times the APR rate then divided by 365 days to get your daily interest amount. The daily interest amount is multiplied by the number of days from the last payment to get the interest income portion of the payment being applied. The balance of the payment goes to reducing the loan principal balance.

Our leases, which are included in Discontinued Operations, are accounted for as either operating leases or direct financing leases. At the inception of operating leases, no lease revenue is recognized and the leased motorcycles, together with the initial direct costs of originating the lease, which are capitalized, appear on the balance sheet as "motorcycles under operating leases-net". The capitalized cost of each motorcycle is depreciated over the lease term, on a straight-line basis, down to the original estimate of the projected value of the motorcycle at the end of the scheduled lease term (the "Residual"). Monthly lease payments are recognized as rental income. An acquisition fee classified as fee income on the financial statements is received and recognized in income at the inception of the lease. Direct financing leases are recorded at the gross amount of the lease receivable, and unearned income at lease inception is amortized over the lease term.

We realize gains and losses as the result of the termination of leases, both at and prior to their scheduled termination, and the disposition of the related motorcycle. The disposal of motorcycles, which reach scheduled termination of a lease, results in a gain or loss equal to the difference between proceeds received from the disposition of the motorcycle and its net book value. Net book value represents the residual value at scheduled lease termination. Lease terminations that occur prior to scheduled maturity as a result of the lessee's voluntary request to purchase the vehicle have resulted in net gains, equal to the excess of the price received over the motorcycle's net book value.

Early lease terminations also occur because of (i) a default by the lessee, (ii) the physical loss of the motorcycle, or (iii) the exercise of the lessee's early termination. In those instances, we receive the proceeds from either the resale or release of the repossessed motorcycle, or the payment by the lessee's insurer. We record a gain or loss for the difference between the proceeds received and the net book value of the motorcycle. We charge fees to manufacturers and other customers related to creating a private label version of our financing program including web access, processing credit applications, consumer contracts and other related documents and processes. Fees received are amortized and booked as income over the length of the contract.

26

Stock-Based Compensation

The Company adopted ASC 718-10, “Stock Compensation Overall” (“ASC 718-10”), which records compensation expense on a straight-line basis, generally over the explicit service period of three to five years.

ASC 718-10 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s Consolidated Statement of Operations. The Company is using the Black-Scholes option-pricing model as its method of valuation for share-based awards. The Company’s determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to the Company’s expected stock price volatility over the term of the awards, and certain other market variables such as the risk free interest rate.

Allowance for Losses

The Company has loss reserves for its portfolio of Leases and for its portfolio of Retail Installment Sales Contracts (“RISC”). The allowance for Lease and RISC losses is increased by charges against earnings and decreased by charge-offs (net of recoveries). To the extent actual credit losses exceed these reserves, a bad debt provision is recorded; and to the extent credit losses are less than the reserve, additions to the reserve are reduced or discontinued until the loss reserve is in line with the Company’s reserve ratio policy. Management’s periodic evaluation of the adequacy of the allowance is based on the Company’s past lease and RISC experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, and current economic conditions. The Company periodically reviews its Lease and RISC receivables in determining its allowance for doubtful accounts.

The Company charges-off receivables when an individual account has become more than 120 days contractually delinquent. In the event of repossession, the asset is immediately sent to auction or held for release.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note A to the Unaudited Condensed Consolidated Financial Statements for a description of recent accounting pronouncements, including the expected dates of adoption and estimated effects on our consolidated financial statements, which is incorporated herein by reference.

27

ITEM 3.                QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4.                CONTROLS AND PROCEDURES

Our management, with the participation of our Chief Executive Officer and our Principal Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report.  Based on that evaluation, and in light of the material weaknesses found in our internal controls, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were not effective.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.  In our assessment of the effectiveness of internal control over financial reporting, we determined that control deficiencies existed that constituted material weaknesses, as described below: 

● 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.

Management is currently evaluating what steps can be taken in order to address these material weaknesses. 

There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the fiscal quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and fraud.  Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met.  Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

28

PART II. OTHER INFORMATION

ITEM 1.                LEGAL PROCEEDINGS

The Company is subject to legal proceedings and claims which arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters should not have a material adverse effect on its financial position, results of operations or liquidity.

On December 18, 2012, a suit was filed by the Company, as plaintiff, asserting claims against a former credit provider seeking substantial damages for the credit provider's alleged breaches of fiduciary duties it owed to the Company, among other causes of action the Company has alleged in a Complaint filed in the United States District Court for the Southern District of New York.  There can be no assurance that the Company will prevail on any of its claims in this action.  This action is currently in the discovery phase.

ITEM 1A.             RISK FACTORS

We are subject to certain risks and uncertainties in our business operations including those which are described below. The risks and uncertainties described below are not the only risks we face. Additional risks anduncertainties not presently known or which are currently deemed immaterial may also impair our business operations.  A description of factors that could materially affect our business, financial condition or operating results were included in Item 1A “Risk Factors” of our Form 10-K for the year ended April 30, 2014, filed August 13, 2014, and is incorporated herein by reference.  

ITEM 2.                UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Each of the issuance and sale of securities described below was deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act as transactions by an issuer not involving a public offering. No advertising or general solicitation was employed in offering the securities. Each purchaser is a sophisticated investor (as described in Rule 506(b) (2) (ii) of Regulation D) or an accredited investor (as defined in Rule 501 of Regulation D), and each received adequate information about the Company or had access to such information, through employment or other relationships, to such information.  The Company applied proceeds from financing activities described below to working capital.

During the three months ended October 31, 2014 the Company:

Borrowed a $56,500, 6% note due June 30, 2015. The note is 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”). The Company had reserved up to 1,356,993 shares of its common stock for conversion pursuant to the terms of the note.  In the event the note is not paid when due, the interest rate is increased to eighteen percent until the note is paid in full.

Borrowed a $55,000 8% convertible note due February 25, 2015 and a $55,000 convertible note due April 27, 2015. The note is convertible at a 40% discount from the lowest closing price for the twenty trading days prior to conversion.  The Company has reserved up to 918,000 shares of its common stock for conversion pursuant to the terms of the note.  In the event the note is not paid when due, the interest rate is increased to fifteen percent until the note is paid in full;

Borrowed a$32,500, 8% note due June 3, 2015 and a $33,000, 8% note due July 14, 2015. The 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”). The Company had reserved up to 1,765,000 shares of its common stock for conversion pursuant to the terms of the notes.  In the event the notes are not paid when due, the interest rate is increased to twenty-two percent until the notes are paid in full.

Borrowed   a $55,000, 12% note due February 19, 2015.   The note is convertible at the note holder’s option at  a variable conversion of 58% multiplied by the average of the three lowest trades 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”). The Company had reserved up to 325,000 shares of its common stock for conversion pursuant to the terms of the note.

Issued 1,043,393 shares of common stock upon the conversion of $279,133 of notes, accrued interest thereon and accounts payable, of which, 153,910 shares remained to be issued at October 31, 2014.

29

Issued 143,809 shares, valued at $58,370, pursuant to consulting agreements.

Issued 196,838 shares of common stock, valued at $49,605 pursuant to terms of notes payable, of which 60,000 shares remained to be issued at October 31, 2014.

Sold 1,256,215 shares of common stock to fourteen accredited investors for $234,808, of which 185,900 shares remained to be issued at October 31, 2014.

ITEM 3.                DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.                MINE SAFETY DISCLOSURE

None.

ITEM 5.                OTHER INFORMATION

Not applicable.

ITEM 6.                EXHIBITS

The following exhibits are filed with this report:

Exhibit No.	Description
11	Statement re: computation of per share earnings is hereby incorporated by reference to “Financial Statements” of Part I - Financial Information, Item 1 - Financial Statements, contained in this Form 10-Q.
12**	2014 Equity Incentive Plan
31.1*	Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a)
31.2*	Certification of Principal Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a)
32.1*	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350
32.2*	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350
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
* Filed herewith ** Incorporated by reference to the registration statement on Form S-8 filed by the registrant with the Commission on November 3, 2014

30

SIGNATURES

           Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SPARTA COMMERCIAL SERVICES, INC.
Date:  December 22, 2014	By:  /s/ Anthony L. Havens
	Anthony L. Havens
	Chief Executive Officer
Date:  December 22, 2014	By:  /s/ Anthony W. Adler
	Anthony W. Adler
	Principal Financial Officer

31

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Anthony L. Havens, certify that:

1. I have reviewed this report on Form 10-Q for the quarterly period ended October 31, 2014 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.

Date:  December 22, 2014

/s/ Anthony L. Havens

Anthony L. Havens

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Anthony W. Adler, certify that:

1. I have reviewed this report on Form 10-Q for the quarterly period ended October 31, 2014 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.

Date:  December 22, 2014

/s/ Anthony W. Adler

Anthony W. Adler

Principal Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Sparta Commercial Services, Inc. (the “Company”) on Form 10-Q for the quarterly period ended October 31, 2014, as filed with the Securities and Exchange Commission on the date therein specified (the “Report”), I, Anthony L. Havens, as Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, that:

(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.

Date:  December 22, 2014

/s/ Anthony L. Havens

Anthony L. Havens

Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Sparta Commercial Services, Inc. (the “Company”) on Form 10-Q for the quarterly period ended October 31, 2014, as filed with the Securities and Exchange Commission on the date therein specified (the “Report”), I, Anthony W. Adler, as Principal Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, that:

(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.

Date:  December 22, 2014

/s/ Anthony W. Adler

Anthony W. Adler

Principal Financial Officer

XML

NOTE E - LOANS PAYABLE TO RELATED PARTIES (Details) (Officer and Director [Member], USD $)	Oct. 31, 2014	Apr. 30, 2014
Officer and Director [Member]
NOTE E - LOANS PAYABLE TO RELATED PARTIES (Details) [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	0.00%	0.00%
Notes Payable, Related Parties	$ 385,853	$ 385,853

XML

NOTE K - GOING CONCERN MATTERS (Details) (USD $)	3 Months Ended		6 Months Ended		124 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014
Going Concern Disclosure [Abstract]
Net Income (Loss) Attributable to Parent	$ (1,154,306)	$ (737,302)	$ (1,662,735)	$ (1,237,064)	$ (45,920,041)

XML

NOTE C - DISCONTINUED OPERATIONS (Details) - Schedule of Maturities of Long-term Debt (USD $)	Oct. 31, 2014	Apr. 30, 2014
NOTE C - DISCONTINUED OPERATIONS (Details) - Schedule of Maturities of Long-term Debt [Line Items]
Total Due	$ 2,370,923	$ 2,019,879
Secured Debt [Member] | Consumer Lease and Loan Lines of Business [Member]
NOTE C - DISCONTINUED OPERATIONS (Details) - Schedule of Maturities of Long-term Debt [Line Items]
2015	97,465
Total Due	$ 97,465

XML

NOTE A - SUMMARY OF ACCOUNTING POLICIES (Details) (USD $)	3 Months Ended		6 Months Ended		124 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014
Accounting Policies [Abstract]
Advertising Expense	$ 0	$ 4,250	$ 3,819	$ 8,500
Earnings Per Share, Basic and Diluted (in Dollars per share)	$ (0.05)	$ (0.05)	$ (0.07)	$ (0.08)
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares)			8,789,459	5,586,766
Net Income (Loss) Attributable to Parent	(1,154,306)	(737,302)	(1,662,735)	(1,237,064)	(45,920,041)
Working Capital (Deficit)	$ 4,513,411		$ 4,513,411		$ 4,513,411

XML

NOTE H - FAIR VALUE MEASUREMENTS (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (USD $)	Oct. 31, 2014	Apr. 30, 2014
NOTE H - FAIR VALUE MEASUREMENTS (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivative liabilities	$ 755,571	$ 601,000
Fair Value, Inputs, Level 1 [Member]
NOTE H - FAIR VALUE MEASUREMENTS (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivative liabilities	0
Fair Value, Inputs, Level 2 [Member]
NOTE H - FAIR VALUE MEASUREMENTS (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivative liabilities	0
Fair Value, Inputs, Level 3 [Member]
NOTE H - FAIR VALUE MEASUREMENTS (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivative liabilities	$ 755,571

XML

NOTE D - NOTES PAYABLE (Details) - Schedule of Fair Value of Convertible Notes (Debt [Member], USD $)	6 Months Ended
	Oct. 31, 2014
Minimum [Member]
Significant Assumptions:
Risk free interest rate	0.039%
Expected options life in years	80 days
Maximum [Member]
Significant Assumptions:
Risk free interest rate	0.074%
Expected stock price volatility	140.00%
Expected dividend payout (in Dollars per share)	0
Expected options life in years	328 days

XML

NOTE C - DISCONTINUED OPERATIONS

6 Months Ended

Oct. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

NOTE C – DISCONTINUED OPERATIONS

In the second quarter of fiscal 2013, the Company’s Board of Directors approved management’s recommendation to discontinue the Company’s consumer lease and loan lines of business and the sale of all of the Company’s portfolio of performing RISCs and a portion of its portfolio of leases. The sale was consummated in that quarter. The assets and liabilities have been accounted for as discontinued operations in the Company’s consolidated balance sheets for all periods presented. 

The operating results related to these lines of business have been included in discontinued operations in the Company’s consolidated statements of loss for all periods presented. The following table presents summarized operating results for those discontinued operations.

	Six Months Ended
	October 31,			October 31,
	2014			2013
Revenues	$	23,163		$	58,997
Net (loss)	$	(111,017	)	$	(278,613	)

As the Company sold all of its portfolio of performing RISCs, and a portion of its portfolio of leases with the remaining leases in final run-off mode, therefore there no portfolio performance measures were calculated for the six months ended October 31, 3014 or the year ending April 30, 2014.

ASSETS INCLUDED IN DISCONTINUED OPERATIONS

MOTORCYCLES AND OTHER VEHICLES UNDER OPERATING LEASES

Motorcycles and other vehicles under operating leases at October 31, 2014 and April 30, 2014:

	October 31,			April 30,
	2014			2014
Motorcycles and other vehicles	$	33,518		$	60,686
Less: accumulated depreciation		(3,525	)		(3,986	)
Motorcycles and other vehicles, net of accumulated depreciation		29,992			56,700
Less: estimated reserve for residual values		(957	)		(1,030	)
Motorcycles and other vehicles under operating leases, net	$	29,036		$	55,670

At April 30, 2014, motorcycles and other vehicles are being depreciated to their estimated residual values over the lives of their lease contracts. Depreciation expense for vehicles for the six months ended October 31, 2014 was $10,902 and for the year ended April 30, 2014, it was $29,411. All of the assets are pledged as collateral for the note described in SECURED NOTES PAYABLE in this Note C.  These remaining leases are in a run-off mode.

INVENTORY

Inventory is comprised of repossessed vehicles and vehicles which have been returned at the end of their lease. Inventory is carried at the lower of depreciated cost or market, applied on a specific identification basis. At October 31, 2014 and at April 30, 2014, the Company had no repossessed vehicles which are held for resale.

RETAIL (RISC) LOAN RECEIVABLES

All of the Company’s RISC performing loan receivables were sold in August 2013.  As of October 31, 2014 and April 30, 2014, the Company had: RISC loans of $19,016 and $20,345, respectively, and deficiency receivables of $3,395 and $0, respectively. At October 31, 2014 and at April 30, 2014, the reserve for doubtful RISC loan receivables was $2,500 and $1,124, respectively.

As the Company sold all of its portfolio of RISCs, and a portion of its portfolio of leases with the remaining leases in final run-off mode, therefore there no portfolio performance measures were calculated for the quarter or six months ending October 31, 2014 or the year ending April 30, 2014.

LIABILITIES INCLUDED IN DISCONTINUED OPERATIONS

SECURED NOTES PAYABLE

	October 31,		April 30,
	2014		2014
Secured, subordinated  individual lender (a)	$	85,385	$	117,508
Secured, subordinated individual lender (b)		12,080		12,912
Total	$	97,465	$	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 October 31, 2014 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 October 31, 2014, 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. The Company was obligated to pay any remainder of the Senior Secured Note by November 1, 2009 which was extended to May 1, 2014, and has granted the note holder a security interest in the Purchased Portfolio. On January 31, 2014, the holder converted $50,000 of the outstanding balance of the Note into 60,606 shares of the Company’s restricted common stock. The note, which had an outstanding balance of $12,080 at October 31, 2014, has been extended to August 31, 2015. 

At October 31, 2014, the notes payable mature as follows:

Year ended October 31,	Amount
2015	$	97,465
Total Due	$	97,465

XML

NOTE H - FAIR VALUE MEASUREMENTS (Details) - Fair Value, Liabilities Measured on Recurring Basis (USD $)	6 Months Ended
	Oct. 31, 2014
NOTE H - FAIR VALUE MEASUREMENTS (Details) - Fair Value, Liabilities Measured on Recurring Basis [Line Items]
Derivative Liability, Fair Value, Beginning of Period	$ 601,000
Increase in Deriative Liabilities	465,047
Decrease in Fair Value	310,476
Derivative Liability, Fair Value, End of Period	755,571
Embedded Derivative Financial Instruments and Warrants [Member]
NOTE H - FAIR VALUE MEASUREMENTS (Details) - Fair Value, Liabilities Measured on Recurring Basis [Line Items]
Derivative Liability, Fair Value, Beginning of Period	601,000
Increase in Deriative Liabilities	465,047
Decrease in Fair Value	310,476
Derivative Liability, Fair Value, End of Period	$ 755,571

XML

NOTE C - DISCONTINUED OPERATIONS (Details) (USD $)	6 Months Ended		12 Months Ended	0 Months Ended		1 Months Ended	12 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Apr. 30, 2014	Jan. 31, 2014	Oct. 31, 2008	Apr. 30, 2009	Apr. 30, 2009
NOTE C - DISCONTINUED OPERATIONS (Details) [Line Items]
Depreciation and Amortization, Discontinued Operations	$ 10,902	$ 0
Vehicles [Member] | Consumer Lease and Loan Lines of Business [Member]
NOTE C - DISCONTINUED OPERATIONS (Details) [Line Items]
Depreciation and Amortization, Discontinued Operations	10,902		29,411
Consumer Other Financing Receivable [Member] | Consumer Lease and Loan Lines of Business [Member]
NOTE C - DISCONTINUED OPERATIONS (Details) [Line Items]
Disposal Group, Including Discontinued Operation, Accounts, Notes and Loans Receivable, Net	19,016		20,345
Financing Receivable, Recorded Investment, Past Due	3,395		0
Financing Receivable, Allowance for Credit Losses	2,500		1,124
Secured Debt [Member] | Minimum [Member] | Consumer Lease and Loan Lines of Business [Member]
NOTE C - DISCONTINUED OPERATIONS (Details) [Line Items]
Debt Instrument, Term	1 year
Secured Debt [Member] | Maximum [Member] | Consumer Lease and Loan Lines of Business [Member]
NOTE C - DISCONTINUED OPERATIONS (Details) [Line Items]
Debt Instrument, Term	5 years
Secured Debt [Member] | Consumer Lease and Loan Lines of Business [Member]
NOTE C - DISCONTINUED OPERATIONS (Details) [Line Items]
Debt Instrument, Interest Rate, Effective Percentage	15.29%
Property, Plant and Equipment, Additions					100,000
Payments to Acquire Property, Plant, and Equipment					80,000	10,000
Other Accrued Liabilities			10,000
Debt Instrument, Face Amount					150,000
Proceeds from Secured Notes Payable					100,000
Debt Instrument, Payment Terms							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.
Debt Instrument, Maturity Date					May 01, 2014
Debt Conversion, Converted Instrument, Amount				50,000
Debt Conversion, Converted Instrument, Shares Issued (in Shares)				60,606
Disposal Group, Including Discontinued Operation, Other Liabilities	$ 12,080

XML

NOTE B - PROPERTY AND EQUIPMENT (Details) - Schedule of Property and Equipment (USD $)	Oct. 31, 2014	Apr. 30, 2014
Schedule of Property and Equipment [Abstract]
Computer equipment, software and furniture	$ 209,341	$ 209,341
Less: accumulated depreciation	(201,160)	(199,367)
Net property and equipment	$ 8,181	$ 9,974

XML

NOTE I - NON-CASH FINANCIAL INFORMATION (Details) (USD $)	6 Months Ended	12 Months Ended
	Oct. 31, 2014	Apr. 30, 2014
NOTE I - NON-CASH FINANCIAL INFORMATION (Details) [Line Items]
Stock Issued During Period, Value, Other (in Dollars)	$ 60,619
Conversion of Convertible Notes and Accrued Interest [Member]
NOTE I - NON-CASH FINANCIAL INFORMATION (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued	888,365
Debt Conversion, Original Debt, Amount (in Dollars)	325,463
Stock Issued During Period, Shares, Conversion of Convertible Securities	153,910	122,451
Stock Issued to Note Holder Pursuant to Terms of Note [Member]
NOTE I - NON-CASH FINANCIAL INFORMATION (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued	156,644
Debt Conversion, Original Debt, Amount (in Dollars)	60,619
Stock Issued During Period, Shares, Conversion of Convertible Securities	60,000	16,666
Stock Issued During Period, Shares, Other	207,787
Stock Issued During Period, Value, Other (in Dollars)	60,619
Stock Issued for Accounts Payable [Member]
NOTE I - NON-CASH FINANCIAL INFORMATION (Details) [Line Items]
Stock Issued During Period, Shares, Other	138,160	20,000
Stock Issued During Period, Value, Other (in Dollars)	$ 47,064

XML

NOTE C - DISCONTINUED OPERATIONS (Details) - Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures (USD $)	3 Months Ended		6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Abstract]
Revenues			$ 23,163	$ 58,997
Net (loss)	$ (16,653)	$ (267,992)	$ (111,017)	$ (278,613)

XML

NOTE C - DISCONTINUED OPERATIONS (Details) - Schedule of Property Subject to or Available for Operating Lease (Consumer Lease and Loan Lines of Business [Member], USD $)	Oct. 31, 2014	Apr. 30, 2014
Consumer Lease and Loan Lines of Business [Member]
Property Subject to or Available for Operating Lease [Line Items]
Motorcycles and other vehicles	$ 33,518	$ 60,686
Less: accumulated depreciation	(3,525)	(3,986)
Motorcycles and other vehicles, net of accumulated depreciation	29,992	56,700
Less: estimated reserve for residual values	(957)	(1,030)
Motorcycles and other vehicles under operating leases, net	$ 29,036	$ 55,670

XML

NOTE B - PROPERTY AND EQUIPMENT

6 Months Ended

Oct. 31, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

NOTE B – PROPERTY AND EQUIPMENT

Major classes of property and equipment at October 31, 2014 and April 30, 2014 consist of the followings:

	October 31, 2014			April 30, 2014
Computer equipment, software and furniture	$	209,341		$	209,341
Less: accumulated depreciation		(201,160	)		(199,367	)
Net property and equipment	$	8,181		$	9,974

Depreciation expense of continuing operations for property and equipment was $1,793 and $2,778, respectively for the six months ended October 31, 2014 and 2013 and $897 and $357, respectively for the three months ended October 31, 2014 and 2013.

XML

NOTE C - DISCONTINUED OPERATIONS (Details) - Schedule of Short-term Debt (USD $)	Oct. 31, 2014		Apr. 30, 2014
Short-term Debt [Line Items]
Senior subordinated notes	$ 97,465		$ 130,420
RISCs and Leases Financed Through Third Parties [Member] | Secured Debt [Member] | Consumer Lease and Loan Lines of Business [Member]
Short-term Debt [Line Items]
Senior subordinated notes	85,385	[1]	117,508	[1]
Senior Note to Purchase Portfolio [Member] | Secured Debt [Member] | Consumer Lease and Loan Lines of Business [Member]
Short-term Debt [Line Items]
Senior subordinated notes	12,080	[2]	12,912	[2]
Secured Debt [Member] | Consumer Lease and Loan Lines of Business [Member]
Short-term Debt [Line Items]
Senior subordinated notes	$ 97,465		$ 130,420

[1] 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 October 31, 2014 is 15.29%.

[2] 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 October 31, 2014, 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. The Company was obligated to pay any remainder of the Senior Secured Note by November 1, 2009 which was extended to May 1, 2014, and has granted the note holder a security interest in the Purchased Portfolio. On January 31, 2014, the holder converted $50,000 of the outstanding balance of the Note into 60,606 shares of the Company's restricted common stock. The note, which had an outstanding balance of $12,080 at October 31, 2014, has been extended to August 31, 2015.

XML

NOTE F - EQUITY TRANSACTIONS (Details) (USD $)	0 Months Ended	6 Months Ended
	May 18, 2013	Oct. 31, 2014	Apr. 30, 2014
NOTE F - EQUITY TRANSACTIONS (Details) [Line Items]
Stockholders' Equity, Reverse Stock Split	one for seventy-five
Preferred Stock, Shares Authorized		10,000,000	10,000,000
Preferred Stock, Par or Stated Value Per Share (in Dollars per share)		$ 0.001	$ 0.001
Common Stock, Shares Authorized		740,000,000	740,000,000
Common Stock, Par or Stated Value Per Share (in Dollars per share)		$ 0.001	$ 0.001
Common Stock, Shares, Outstanding		24,397,250	20,987,353
Common Stock, Shares, Issued		24,397,250	20,987,353
Allocated Share-based Compensation Expense (in Dollars)		$ 204,388
Stock Issued During Period, Value, New Issues (in Dollars)		497,479
Stock Issued During Period, Value, Other (in Dollars)		60,619
Number of employees		3
Series A Preferred Stock [Member]
NOTE F - EQUITY TRANSACTIONS (Details) [Line Items]
Preferred Stock, Shares Authorized		35,850	35,850
Preferred Stock, Par or Stated Value Per Share (in Dollars per share)		$ 100	$ 100
Preferred Stock, Shares Issued		125	125
Preferred Stock, Shares Outstanding		125	125
Dividends Payable (in Dollars)		7,186	6,803
Preferred Stock, Dividend Payment Terms		At the Company’s option, these dividends may be paid in shares of the Company’s Common Stock.
Series B Preferred Stock [Member] | Principal [Member] | Redemption of Preferred Shares for Note Subscription Receivable [Member]
NOTE F - EQUITY TRANSACTIONS (Details) [Line Items]
Notes Issued (in Dollars)		1,215,000
Series B Preferred Stock [Member] | Accrued Interest [Member] | Redemption of Preferred Shares for Note Subscription Receivable [Member]
NOTE F - EQUITY TRANSACTIONS (Details) [Line Items]
Notes Issued (in Dollars)		116,107
Series B Preferred Stock [Member] | Redemption of Preferred Shares for Note Subscription Receivable [Member]
NOTE F - EQUITY TRANSACTIONS (Details) [Line Items]
Stock Redeemed or Called During Period, Shares		90
Common stock to be issued, shares		43.11
Series B Preferred Stock [Member]
NOTE F - EQUITY TRANSACTIONS (Details) [Line Items]
Preferred Stock, Shares Authorized		1,000	1,000
Preferred Stock, Par or Stated Value Per Share (in Dollars per share)		$ 0.001	$ 0.001
Preferred Stock, Liquidation Preference Per Share (in Dollars per share)		$ 10,000
Preferred Stock, Shares Issued		67	157
Preferred Stock, Shares Outstanding		67	157
Preferred Stock, to be Issued		29.37
Series C Preferred Stock [Member]
NOTE F - EQUITY TRANSACTIONS (Details) [Line Items]
Preferred Stock, Shares Authorized		200,000	200,000
Preferred Stock, Par or Stated Value Per Share (in Dollars per share)		$ 0.001	$ 0.001
Preferred Stock, Liquidation Preference Per Share (in Dollars per share)		$ 10
Preferred Stock, Shares Issued		0	0
Preferred Stock, Shares Outstanding		0	0
Conversion of Convertible Notes and Accrued Interest [Member]
NOTE F - EQUITY TRANSACTIONS (Details) [Line Items]
Common stock to be issued, shares		153,910	122,451
Debt Conversion, Converted Instrument, Shares Issued		888,365
Debt Conversion, Original Debt, Amount (in Dollars)		325,463
Stock Issued for Cash [Member]
NOTE F - EQUITY TRANSACTIONS (Details) [Line Items]
Common stock to be issued, shares			101,877
Stock Issued During Period, Shares, New Issues		2,038,519
Number of Accredited Investors		18
Stock Issued During Period, Value, New Issues (in Dollars)		497,479
Stock to be Issued		185,900
Stock Issued to Note Holder Pursuant to Terms of Note [Member]
NOTE F - EQUITY TRANSACTIONS (Details) [Line Items]
Common stock to be issued, shares		60,000	16,666
Debt Conversion, Converted Instrument, Shares Issued		156,644
Debt Conversion, Original Debt, Amount (in Dollars)		60,619
Stock Issued During Period, Shares, Other		207,787
Stock Issued During Period, Value, Other (in Dollars)		60,619
Stock Issued to Consultants [Member]
NOTE F - EQUITY TRANSACTIONS (Details) [Line Items]
Stock Issued During Period, Shares, Issued for Services		240,109
Stock Issued During Period, Value, Issued for Services (in Dollars)		126,928
Shares Issued in Lieu of Payment of Accounts Payable [Member]
NOTE F - EQUITY TRANSACTIONS (Details) [Line Items]
Common stock to be issued, shares			20,000
Stock Issued During Period, Shares, Other		138,160
Stock Issued During Period, Value, Other (in Dollars)		47,064
Exchange for Outstanding Stock Options [Member]
NOTE F - EQUITY TRANSACTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period		31,780
Stock Issued During Period, Value, Stock Options Exercised (in Dollars)		$ 14,269

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Oct. 31, 2014	Apr. 30, 2014
ASSETS
Cash and cash equivalents	$ 9,558	$ 70,456
Accounts receivable	164,678	182,343
Property and equipment, net of accumulated depreciation and amortization of $201,160 and $199,367, respectively (NOTE B)	8,181	9,974
Goodwill	10,000	10,000
Other assets	50,887	60,992
Deposits	117,178	40,568
Total assets from continuing operations	360,481	374,333
Assets from discontinued operations (NOTE C)	49,233	90,024
Total assets	409,714	464,357
Liabilities:
Accounts payable and accrued expenses	1,313,311	1,259,368
Notes payable net of beneficial conversion feature of $366,434 and $296,384, respectively (NOTE D)	2,370,923	2,019,879
Loans payable-related parties (NOTE E)	385,853	385,853
Derivative liabilities	755,571	601,000
Total liabilities from continuing operations	4,825,660	4,266,100
Liabilities from discontinued operations (NOTE C)	97,465	130,420
Total liabilities	4,923,125	4,396,520
Deficit:
Common stock, $0.001 par value; 740,000,000 shares authorized, 24,397,250, and 20,987,353 shares issued and outstanding, respectively	24,397	20,987
Common stock to be issued, 407,050 and 283,777, respectively	407	284
Preferred stock B to be issued, 29 and 72.48 shares, respectively	29	72
Additional paid-in-capital	41,621,763	41,738,613
Subscriptions receivable	(903,309)	(2,118,309)
Accumulated deficit	(45,920,041)	(44,257,306)
Total deficiency in stockholders' equity	(5,163,583)	(4,601,588)
Noncontrolling interest	650,173	669,424
Total Deficit	(4,513,411)	(3,932,164)
Total Liabilities and Deficit	409,714	464,357
Series A Preferred Stock [Member]
Deficit:
Preferred shares, value, issued	12,500	12,500
Series B Preferred Stock [Member]
Deficit:
Preferred shares, value, issued	670	1,570
Series C Preferred Stock [Member]
Deficit:
Preferred shares, value, issued	$ 0	$ 0

XML

NOTE J - SUBSEQUENT EVENTS (Details) (USD $)	6 Months Ended		2 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Dec. 19, 2014	Apr. 30, 2014
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Stock Issued During Period, Value, New Issues	$ 497,479
Stock Issued During Period, Value, Other	60,619
Proceeds from Convertible Debt	485,000	460,263
Convertible Notes Payable [Member] | Subsequent Event [Member] | Note Payable #1 [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Debt Instrument, Maturity Date			Dec. 12, 2015
Debt Instrument, Face Amount			55,125
Debt Instrument, Interest Rate, Stated Percentage			8.00%
Debt Instrument, Convertible, Terms of Conversion Feature			The note is convertible at the note holder’s option at  a variable conversion of 60% multiplied by the average of the three closing prices in the fifteen 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.
Convertible Notes Payable [Member] | Subsequent Event [Member] | Notes Payable #2 [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Debt Instrument, Maturity Date			Aug. 19, 2015
Debt Instrument, Face Amount			33,000
Debt Instrument, Interest Rate, Stated Percentage			8.00%
Debt Instrument, Convertible, Terms of Conversion Feature			The note is convertible at the note holder’s option at a variable conversion price of 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”).
Convertible Notes Payable [Member] | Subsequent Event [Member] | Note Payable #3 [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Debt Instrument, Maturity Date			Nov. 24, 2015
Debt Instrument, Face Amount			220,000
Debt Instrument, Interest Rate, Stated Percentage			10.00%
Debt Instrument, Convertible, Terms of Conversion Feature			The note is convertible at the note holder’s option at a variable conversion prices of 58% multiplied by the lowest closing price for the common stock during the five 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”).
Proceeds from Notes Payable			55,000
Debt Instrument, Description			The note holder has the right but not the obligation, subject to the Company’s agreement, to advance the remaining $165,000 balance of the note on or before the due date.
Convertible Notes Payable [Member] | Subsequent Event [Member] | Note Payable #4 [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Stock Issued During Period, Shares, Other (in Shares)			100,000
Debt Instrument, Face Amount			100,000
Debt Instrument, Interest Rate, Stated Percentage			8.00%
Proceeds from Convertible Debt			65,000
Convertible Notes Payable			35,000
Debt Instrument, Collateral Amount			76,610
Subsequent Event [Member] | Stock Issued to Note Holder Pursuant to Terms of Note [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Stock Issued During Period, Shares, Other (in Shares)			123,813
Stock Issued During Period, Value, Other			20,567
Subsequent Event [Member] | Stock Issued to Consultants [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Stock Issued During Period, Shares, Issued for Services (in Shares)			362,000
Stock Issued During Period, Value, Issued for Services			109,990
Subsequent Event [Member] | Shares Previously Classified to be Issued [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Common stock to be issued, shares (in Shares)			211,682
Subsequent Event [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued (in Shares)			605,179
Debt Conversion, Original Debt, Amount			76,020
Stock Issued During Period, Shares, New Issues (in Shares)			1,193,288
Number of Accredited Investors			4
Stock Issued During Period, Value, New Issues			123,400
Stock Issued to Note Holder Pursuant to Terms of Note [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued (in Shares)	156,644
Debt Conversion, Original Debt, Amount	60,619
Stock Issued During Period, Shares, Other (in Shares)	207,787
Stock Issued During Period, Value, Other	60,619
Common stock to be issued, shares (in Shares)	60,000			16,666
Stock Issued to Consultants [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Stock Issued During Period, Shares, Issued for Services (in Shares)	240,109
Stock Issued During Period, Value, Issued for Services	$ 126,928

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)	6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$ (1,662,735)	$ (1,237,064)
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustments	0	(71)
Dividend on preferred stock	382	79,097
Loss allocable to non-controlling interest	(19,251)	(27,969)
Depreciation and amortization	1,793	2,778
Amortization of debt discount	314,065	195,942
Change in fair value of derivative liabilities	(8,704)	26,720
Shares issued for finance cost	60,619	26,872
Shares issued for interest payable	127,304	0
Equity based compensation	204,386	119,037
(Increase) decrease in operating assets:
Accounts receivable	(98,442)	(64,117)
Prepaid expenses and other assets	0	0
Restricted cash	0	0
Other assets	(66,505)	10,705
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses	38,375	4,707
Net cash used in operating activities	(1,108,713)	(863,363)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash provided by investing activities	0	0
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from sale of common stock	497,478	513,161
Net proceeds from convertible notes	485,000	460,263
Net payments on notes payable	(97,500)	(137,500)
Net proceeds from other notes	155,000	25,000
Net (payment of) loan proceeds from other related parties	0	(7,407)
Net cash provided by financing activities	1,039,978	853,517
Cash flows from discontinued operations:
Depreciation of assets of discontinued operations	10,902	0
Cash (used in) operating activities of discontinued operations	0	(9,197)
Cash provided by investing activities of discontinued operations	0	0
Cash (used in) financing activities of discontinued operations	(3,065)	0
Net Cash flow from discontinued operation	7,837	(9,197)
Net (decrease) in cash	(60,898)	(19,043)
Unrestricted cash and cash equivalents, beginning of period	70,456	38,213
Unrestricted cash and cash equivalents, end of period	9,558	19,170
Cash paid for:
Interest	27,359	10,807
Income taxes	$ 944	$ 3,664

XML

NOTE D - NOTES PAYABLE (Details) - Schedule of Notes Payble (USD $)	Oct. 31, 2014		Apr. 30, 2014
NOTE D - NOTES PAYABLE (Details) - Schedule of Notes Payble [Line Items]
Note payable, gross	$ 2,737,357		$ 2,316,263
Less, Debt discount	(366,434)		(296,384)
Total	2,370,923		2,019,879
Convertible Notes Payable [Member] | Notes Convertible at Holder's Option [Member]
NOTE D - NOTES PAYABLE (Details) - Schedule of Notes Payble [Line Items]
Note payable, gross	2,167,358	[1]	1,901,263	[1]
Convertible Notes Payable [Member] | Notes with Interest Only, Convertible at Company's Option [Member]
NOTE D - NOTES PAYABLE (Details) - Schedule of Notes Payble [Line Items]
Note payable, gross	390,000	[2]	390,000	[2]
Loans Payable [Member]
NOTE D - NOTES PAYABLE (Details) - Schedule of Notes Payble [Line Items]
Note payable, gross	$ 180,000	[3]	$ 25,000	[3]

[1] (a) Notes convertible at holder's option consists of:(i) a $1,258,368, 8% note originally due April 30, 2013, but subsequently amended to such time as the law suit filed by the Company (see: PART II, ITEM 1 LEGAL PROCEEDINGS) is fully adjudicated, convertible at the holder's option at $0.495 per share. In fiscal 2012, the Company had recorded a $663,403 beneficial conversion discount for this note which was fully amortized during fiscal 2013; (ii) a $56,500, 6% note due June 30, 2015. The Company has recorded beneficial conversion discounts totaling $56,500 for the note. The discount is being fully amortized over the terms of the note. The note is 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"). The Company had reserved up to 1,356,993 shares of its common stock for conversion pursuant to the terms of the note. In the event the note is not paid when due, the interest rate is increased to eighteen percent until the note is paid in full;(iii) a $25,000, 12% convertible note due May 27, 2014. The note is convertible at $0.59 per share. If the Company has not redeemed the outstanding principal and accrued interest of this Debenture in cash by the Maturity Date and the original Debenture between the Holder and the Company dated September 19, 2007 is no longer outstanding for every 30 day period past the Maturity Date of which the principal balance an any accrued interest of this Debenture remain outstanding, the Company shall issue the Holder the greater of (i) 1,333 shares of the Company's restricted common stock or (ii) the number of shares of the Company's restricted common stock equal to $2,000 determined on the basis of the volume weighted average closing price "VWACP" of the Company's common stock for the five consecutive trading days immediately prior to the 19th of each month (for a day to be included in the calculation, there must have been at least 100 shares traded on that day). As long as the Company remains current on the payment of the shares under this Paragraph 12, the Debenture shall be considered past due but not in default. The Company issued the holder 5,000 shares of its restricted common stock as inducement for the loan and a $50,000, 12% note, due March 20, 2015, convertible at the holder's option at $0.59 per share), the Company issued the holder 10,000 shares of its restricted common stock as inducement for the loan. In fiscal 2012, the Company has recorded a $50,000 beneficial conversion discount for this note. The discount is being fully amortized over the term of the note;(iv) seven notes aggregating $118,250, all due August 15, 2015 with interest ranging from 15% to 20%, with accrued interest compounding monthly at 8%, the Company is paying 667 monthly penalty shares until the note is paid in full on one $25,000 note which had been past due, all of the notes are convertible at the holder's option at $0.25 per share. In fiscal 2012, the Company has recorded a $5,340 beneficial conversion discount for these notes. The discount is being fully amortized over the term of the notes; (v) three notes aggregating $106,250, all due August 15, 2015 with interest ranging from 20% to 25% with accrued interest compounding monthly at 8%, all of the notes are convertible at the holder's option at $0.25 per share. In fiscal 2012, the Company has recorded a $6,120 beneficial conversion discount for these notes. The discount is being fully amortized over the term of the notes; (vi) a $59,000, 5% convertible note due April 16, 2015. This lender has committed to lend up to $330,000 (three hundred thousand) in the form of a $165,000 note. 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 borrower is only required to repay the amount funded and the Company is not required to repay any unfunded portion of this note. The second note has been amended to include a 3% closing fee on the amount of each sum advanced plus a 5% due diligence fee on the amount of each sum advanced. The combined fees shall be added to the sum advanced for all purposes under the Note, including when calculating the amount of the interest charge. The maturity date 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 is the lesser of $1.20 or 70% of the average of the three lowest closing prices during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company (In the case that conversion shares are not deliverable by DWAC an additional 5% discount will apply; and if the shares are chilled for deposit into the DTC system and only eligible for Xclearing deposit an additional 7.5% discount shall apply). Unless otherwise agreed in writing by both parties, at no time will the lender convert any amount of this note into common stock that would result in the lender owning more than 4.99% of the common stock outstanding. In fiscal 2014, the Company has recorded a $39,784 beneficial conversion discount for the note. The discount is being fully amortized over the initial term of the note;(vii) a $13,720 outstanding balance of a $27,500, 5% convertible note due October 21, 2014, a $27,500, 5% convertible note due January 28, 2015 and a $27,500, 5% convertible note due April 29, 2015. This lender has committed to lend up to $165,000. 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 borrower 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 previous to the day the conversion notice is delivered to the Company. (In the case that conversion shares are not deliverable by DWAC, the principal amount of the note shall be increased by $10,000, and the conversion price shall be redefined to equal the lesser of (a) $0.60 or (b) 50% of the lowest closing price during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company). Unless otherwise agreed in writing by both parties, at no time will the lender convert any amount of this note into common stock that would result in the lender owning more than 4.99% of the common stock outstanding. In fiscal 2014, the Company has recorded a $49,085 beneficial conversion discount for the notes. The discounts are being fully amortized over the terms of the notes; $500 outstanding balance on a $13,900, and 10% convertible note due June 1, 2014. The Conversion Price for this note is the lesser of $0.50 or 70% of the lowest closing prices during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company. (In the case that conversion shares are not deliverable by DWAC, the principal amount of the note shall be increased by $15,000, and the conversion price shall be redefined to equal the lesser of (a) $0.005 or (b) 50% of the lowest closing prices during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company). In fiscal 2014, the Company has recorded an $11,158 beneficial conversion discount for the note. The discount is being fully amortized over the term of the note; and $625 outstanding balance on a $60,000, 12% convertible note due March 20, 2015. The Conversion Price for this note is 65% of the lowest closing price during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company. (In the case that conversion shares are not deliverable by DWAC, the principal amount of the note shall be increased by $15,000, and the conversion price shall be redefined to equal the lesser of (a) $0.005 or (b) 50% of the lowest closing price during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company). In fiscal 2014, the Company has recorded a $32,309 beneficial conversion discount for the note. The discount is being fully amortized over the term of the note; (viii) a $55,000 8% convertible note due February 25, 2015 and a $55,000 convertible note due April 27, 2015. Both notes are convertible at a 40% discount from the lowest closing price for the twenty trading days prior to conversion. The Company has recorded a $99,161 beneficial conversion discount for the two notes. The discount is being fully amortized over the initial term of the notes. The Company had reserved up to 918,000 shares of its common stock for conversion pursuant to the terms of the notes. In the event the note is not paid when due, the interest rate is increased to fifteen percent until the notes are paid in full; (ix) a $42,500, 8% note due February 2, 2015, $37,500, 8% note due April 27, 2015, a$32,500, 8% note due June 3, 2015 and a $33,000, 8% note due July 14, 2015. The Company has recorded a beneficial conversion discount of $114,215 for the notes. The discount is being fully amortized over the term of the notes. The 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"). The Company had reserved up to 2,900,000 shares of its common stock for conversion pursuant to the terms of the note. In the event the note is not paid when due, the interest rate is increased to twenty-two percent until the note is paid in full;(x) a $20,000 outstanding balance of a $40,000, 6% note due April 3, 2015. In fiscal 2014, the Company has recorded a beneficial conversion discount of $20,085 for the note. The discount is being fully amortized over the term of the note. The note is convertible at the note holder's option at the lesser of $1.20 or a variable conversion of 65% multiplied by the lowest VWAP in the five 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"). The Company had reserved up to 310,000 shares of its common stock for conversion pursuant to the terms of the note. In the event the note is not paid when due, the interest rate is increased to twenty-two percent until the note is paid in full; and(xi) a $44,770, 5% note due April 15, 2016. In fiscal 2014, the Company has recorded a beneficial conversion discount of $35,816 for the note. The discount is being fully amortized over the term of the note. The note is convertible at the note holder's option at the rate of 1.5 shares of common stock for each dollar converted. In the event the note is not paid when due, the interest rate is increased to eighteen percent until the note is paid in full; and(xii) a $50,000, 8% note due December 20, 2014. The Company has recorded a beneficial conversion discount of $36,207 for the note. The discount is being fully amortized over the term of the note. The note is convertible at the note holder's option at a variable conversion of 58% multiplied by the average of three lowest trades 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"). The Company had reserved up to 340,000 shares of its common stock for conversion pursuant to the terms of the note, and a $55,000, 12% note due February 19, 2015. The Company has recorded a beneficial conversion discount of $48,015 for the note. The discount is being fully amortized over the term of the note. The note is convertible at the note holder's option at a variable conversion of 58% multiplied by the average of the three lowest trades 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"). The Company had reserved up to 325,000 shares of its common stock for conversion pursuant to the terms of the note.

[2] Notes with interest only convertible at Company's option consist of: (i) a 22% note in the amount of $10,000 due May 31, 2015; (ii) a $25,000 note due May 1, 2011, which was extended to October 31, 2013. The Company is paying the note holder 3,333 shares per month until the note is paid or renegotiated. So long as the Company pays the monthly shares this note is not in default. Interest is payable on the $10,000 note at the Company's option and on the $25,000 note at the holder's option in cash or in shares at the rate of $1.50 per share;(iii) a $315,000, 12.462% note due April 30, 2014, but subsequently amended to such time as the law suit filed by the Company (see: PART II, ITEM 1 LEGAL PROCEEDINGS) is fully adjudicated. Interest is payable quarterly with a minimum or $600 in cash with the balance payable in cash or stock at the Company's options calculated as the volume weighted average price of the Company's common stock for the ten day trading period immediately preceding the last day of each three month period;(iv) a $25,000 8% note due May 31, 2015, the Company issued the note holder 5,000 shares of its common stock in connection with this loan Pursuant to the terms of this note, the Company is required to issue to the note holder 5,000 shares of its common stock for each month or portion thereof that the note remains unpaid. Interest is payable on all this note at the Company's option in cash or in shares at the rate of $0.35 per share; and a(v) $15,000 5% note due May 31, 2015, the Company agreed to issue the note holder 5,000 shares of its common stock in connection with this loan.

[3] Non-convertible notes consist of: (i) a $25,000 note due May 31, 2015 which bears no interest. Pursuant to the terms of this note, the Company is required to issue to the note holder 1,000 shares of its common stock for each month or portion thereof that the note remains unpaid; (ii) a $75,000, 20% note due March 18, 2015. The note is secured by 640,197 shares of the Company's restricted common stock. The Company issued this Noteholder 106,700 shares of restricted common stock as inducement for the loan; and (iii) two $20,000, 8% notes due January 5, 2015. The notes are secured by a $37,401 security deposit. In case of default the interest rate is increased to eighteen percent and the Company shall issue each noteholder 10,000 shares of its restricted common stock for every ten day period the notes remain unpaid.(iv) a $40,000, 8% note due December 31, 2014. The Company agreed to issue 10,000 shares of restricted common stock as an inducement for the loan.

XML

NOTE D - NOTES PAYABLE (Tables)

6 Months Ended

Oct. 31, 2014

NOTE D - NOTES PAYABLE (Tables) [Line Items]

Schedule of Debt [Table Text Block]

Notes Payable	October 31, 2014			April 30, 2014
Notes convertible at holder’s option (a)	$	2,167,358		$	1,901,263
Notes with interest only convertible at Company’s option (b)		390,000			390,000
Non-convertible notes payable (c)		180,000			25,000
Subtotal		2,737,357			2,316,263
Less, Debt discount		(366,434	)		(296,384	)
Total	$	2,370,923		$	2,019,879

 (a) Notes convertible at holder’s option consists of:

(i)                             a $1,258,368, 8% note originally due April 30, 2013, but subsequently amended to such time as the law suit filed by the Company (see: PART II, ITEM 1 LEGAL PROCEEDINGS) is fully adjudicated, convertible at the holder’s option at $0.495 per share. In fiscal 2012, the Company had recorded a $663,403 beneficial conversion discount for this note which was fully amortized during fiscal 2013; 

(ii)                            a $56,500, 6% note due June 30, 2015. The Company has recorded beneficial conversion discounts totaling $56,500 for the note. The discount is being fully amortized over the terms of the note.   The note is 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”). The Company had reserved up to 1,356,993 shares of its common stock for conversion pursuant to the terms of the note.  In the event the note is not paid when due, the interest rate is increased to eighteen percent until the note is paid in full;

(iii)                           a $25,000, 12% convertible note due May 27, 2014. The note is convertible at $0.59 per share. If the Company has not redeemed the outstanding principal and accrued interest of this Debenture in cash by the Maturity Date and the original Debenture between the Holder and the Company dated September 19, 2007 is no longer outstanding for every 30 day period past the Maturity Date of which the principal balance an any accrued interest of this Debenture remain outstanding, the Company shall issue the Holder the greater of (i) 1,333 shares of the Company’s restricted common stock or (ii) the number of shares of the Company’s restricted common stock equal to $2,000 determined on the basis of the volume weighted average closing price “VWACP” of the Company’s common stock for the five consecutive trading days immediately prior to the 19th of each month (for a day to be included in the calculation, there must have been at least 100 shares traded on that day). As long as the Company remains current on the payment of the shares under this Paragraph 12, the Debenture shall be considered past due but not in default. The Company issued the holder 5,000 shares of its restricted common stock as inducement for the loan and a $50,000, 12% note, due March 20, 2015, convertible at the holder’s option at $0.59 per share), the Company issued the holder 10,000 shares of its restricted common stock as inducement for the loan. In fiscal 2012, the Company has recorded a $50,000 beneficial conversion discount for this note. The discount is being fully amortized over the term of the note;

(iv)                           seven notes aggregating $118,250, all due August 15, 2015 with interest ranging from 15% to 20%, with accrued interest compounding monthly at 8%, the Company is paying 667 monthly penalty shares until the note is paid in full on one $25,000 note which had been past due, all of the notes are convertible at the holder’s option at $0.25 per share. In fiscal 2012, the Company has recorded a $5,340 beneficial conversion discount for these notes. The discount is being fully amortized over the term of the notes; 

(v)                            three notes aggregating $106,250, all due August 15, 2015 with interest ranging from 20% to 25% with accrued interest compounding monthly at 8%, all of the notes are convertible at the holder’s option at $0.25 per share.  In fiscal 2012, the Company has recorded a $6,120 beneficial conversion discount for these notes. The discount is being fully amortized over the term of the notes;  

(vi)                           a $59,000, 5% convertible note due April 16, 2015. This lender has committed to lend up to $330,000 (three hundred thousand) in the form of a $165,000 note. 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 borrower is only required to repay the amount funded and the Company is not required to repay any unfunded portion of this note. The second note has been amended to include a 3% closing fee on the amount of each sum advanced plus a 5% due diligence fee on the amount of each sum advanced. The combined fees shall be added to the sum advanced for all purposes under the Note, including when calculating the amount of the interest charge. The maturity date 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 is the lesser of $1.20 or 70% of the average of the three lowest closing prices during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company (In the case that conversion shares are not deliverable by DWAC an additional 5% discount will apply; and if the shares are chilled for deposit into the DTC system and only eligible for Xclearing deposit an additional 7.5% discount shall apply).  Unless otherwise agreed in writing by both parties, at no time will the lender convert any amount of this note into common stock that would result in the lender owning more than 4.99% of the common stock outstanding. In fiscal 2014, the Company has recorded a $39,784 beneficial conversion discount for the note. The discount is being fully amortized over the initial term of the note;

(vii)                          a $13,720 outstanding balance of a  $27,500, 5% convertible note due October 21, 2014,  a $27,500, 5% convertible note due January 28, 2015 and a $27,500, 5% convertible note due April 29, 2015. This lender has committed to lend up to $165,000. 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 borrower 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 previous to the day the conversion notice is delivered to the Company. (In the case that conversion shares are not deliverable by DWAC, the principal amount of the note shall be increased by $10,000, and the conversion price shall be redefined to equal the lesser of (a) $0.60 or (b) 50% of the lowest closing price during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company).  Unless otherwise agreed in writing by both parties, at no time will the lender convert any amount of this note into common stock that would result in the lender owning more than 4.99% of the common stock outstanding. In fiscal 2014, the Company has recorded a $49,085 beneficial conversion discount for the notes. The discounts are being fully amortized over the terms of the notes; $500 outstanding balance on a $13,900, and 10% convertible note due June 1, 2014. The Conversion Price for this note is the lesser of $0.50 or 70% of the lowest closing prices during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company. (In the case that conversion shares are not deliverable by DWAC, the principal amount of the note shall be increased by $15,000, and the conversion price shall be redefined to equal the lesser of (a) $0.005 or (b) 50% of the lowest closing prices during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company). In fiscal 2014, the Company has recorded an $11,158 beneficial conversion discount for the note. The discount is being fully amortized over the term of the note; and $625 outstanding balance on a $60,000, 12% convertible note due March 20, 2015. The Conversion Price for this note is 65% of the lowest closing price during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company. (In the case that conversion shares are not deliverable by DWAC, the principal amount of the note shall be increased by $15,000, and the conversion price shall be redefined to equal the lesser of (a) $0.005 or (b) 50% of the lowest closing price during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company). In fiscal 2014, the Company has recorded a $32,309 beneficial conversion discount for the note. The discount is being fully amortized over the term of the note;  

(viii)                         a $55,000 8% convertible note due February 25, 2015 and a $55,000 convertible note due April 27, 2015. Both notes are convertible at a 40% discount from the lowest closing price for the twenty trading days prior to conversion. The Company has recorded a $99,161 beneficial conversion discount for the two notes. The discount is being fully amortized over the initial term of the notes. The Company had reserved up to 918,000 shares of its common stock for conversion pursuant to the terms of the notes.  In the event the note is not paid when due, the interest rate is increased to fifteen percent until the notes are paid in full; 

(ix)                           a $42,500, 8% note due February 2, 2015, $37,500, 8% note due April 27, 2015, a$32,500, 8% note due June 3, 2015 and a $33,000, 8% note due July 14, 2015. The Company has recorded a beneficial conversion discount of $114,215 for the notes. The discount is being fully amortized over the term of the notes.   The 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”). The Company had reserved up to 2,900,000 shares of its common stock for conversion pursuant to the terms of the note.  In the event the note is not paid when due, the interest rate is increased to twenty-two percent until the note is paid in full;

(x)                             a $20,000 outstanding balance of a $40,000, 6% note due April 3, 2015. In fiscal 2014, the Company has recorded a beneficial conversion discount of $20,085 for the note. The discount is being fully amortized over the term of the note.   The note is convertible at the note holder’s option at the lesser of $1.20 or a variable conversion of 65% multiplied by the lowest VWAP in the five 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”). The Company had reserved up to 310,000 shares of its common stock for conversion pursuant to the terms of the note.  In the event the note is not paid when due, the interest rate is increased to twenty-two percent until the note is paid in full; and

(xi)                            a $44,770, 5% note due April 15, 2016. In fiscal 2014, the Company has recorded a beneficial conversion discount of $35,816 for the note. The discount is being fully amortized over the term of the note.   The note is convertible at the note holder’s option at the rate of 1.5 shares of common stock for each dollar converted.  In the event the note is not paid when due, the interest rate is increased to eighteen percent until the note is paid in full; and

(xii)                           a $50,000, 8% note due December 20, 2014. The Company has recorded a beneficial conversion discount of $36,207 for the note. The discount is being fully amortized over the term of the note.   The note is convertible at the note holder’s option at  a variable conversion of 58% multiplied by the average of three lowest trades 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”). The Company had reserved up to 340,000 shares of its common stock for conversion pursuant to the terms of the note, and a $55,000, 12% note due February 19, 2015. The Company has recorded a beneficial conversion discount of $48,015 for the note. The discount is being fully amortized over the term of the note.   The note is convertible at the note holder’s option at  a variable conversion of 58% multiplied by the average of the three lowest trades 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”). The Company had reserved up to 325,000 shares of its common stock for conversion pursuant to the terms of the note.

(b) Notes with interest only convertible at Company’s option consist of:

 (i)                            a 22% note in the amount of $10,000 due May 31, 2015;

 (ii)                           a $25,000 note due May 1, 2011, which was extended to October 31, 2013. The Company is paying the note holder 3,333 shares per month until the note is paid or renegotiated. So long as the Company pays the monthly shares this note is not in default. Interest is payable on the $10,000 note at the Company’s option and on the $25,000 note at the holder’s option in cash or in shares at the rate of $1.50 per share;

(iii)                           a $315,000, 12.462% note due April 30, 2014, but subsequently amended to such time as the law suit filed by the Company (see: PART II, ITEM 1 LEGAL PROCEEDINGS) is fully adjudicated. Interest is payable quarterly with a minimum or $600 in cash with the balance payable in cash or stock at the Company’s options calculated as the volume weighted average price of the Company’s common stock for the ten day trading period immediately preceding the last day of each three month period;

(iv)                           a $25,000 8% note due May 31, 2015, the Company issued the note holder 5,000 shares of its common stock in connection with this loan Pursuant to the terms of this note, the Company is required to issue to the note holder 5,000 shares of its common stock for each month or portion thereof that the note remains unpaid. Interest is payable on all this note at the Company’s option in cash or in shares at the rate of $0.35 per share; and a

(v)                            $15,000 5% note due May 31, 2015, the Company agreed to issue the note holder 5,000 shares of its common stock in connection with this loan.

(c) Non-convertible notes consist of:

     (i)                            a $25,000 note due May 31, 2015 which bears no interest. Pursuant to the terms of this note, the Company is required to issue to the note holder 1,000 shares of its common stock for each month or portion thereof that the note remains unpaid;

     (ii)                           a $75,000, 20% note due March 18, 2015. The note is secured by 640,197 shares of the Company’s restricted common stock. The Company issued this Noteholder 106,700 shares of restricted common stock as inducement for the loan; and

 (iii)                          two $20,000, 8% notes due January 5, 2015. The notes are secured by a $37,401 security deposit. In case of default the interest rate is increased to eighteen percent and the Company shall issue each noteholder 10,000 shares of its restricted common stock for every ten day period the notes remain unpaid.

(iv)                           a $40,000, 8% note due December 31, 2014. The Company agreed to issue 10,000 shares of restricted common stock as an inducement for the loan.

Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The value of the derivative liability was re-assessed as of October 31, 2014 resulting in a gain to the consolidated statement of operations of $8,704 for the six months ended October31, 2014 and a loss to the consolidated statement of operations of $203,825 for the three months ended October 31, 2014.

	October 31, 2014
Opening balance, April 30, 2014	$	601,000
Derivative liability reclassified to additional paid in capital		(81,821	)
Derivative financial liability arising on the issue of convertible notes		465,047
Fair value adjustments		(228,655	)
Closing balance	$	755,571

Warrant [Member]

NOTE D - NOTES PAYABLE (Tables) [Line Items]

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block]

The change in fair value of the derivative liabilities of warrants outstanding at October 31, 2014 was calculated with the following average assumptions, using a Black-Scholes option pricing model are as follows:

Significant Assumptions:
Risk free interest rate	Ranging from	0.15	%	to	1.02	%
Expected stock price volatility					140	%
Expected dividend payout					0
Expected options life in years	Ranging from	.15	year	to	3.17	years

Debt [Member]

NOTE D - NOTES PAYABLE (Tables) [Line Items]

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block]

The change in fair value of the derivative liabilities of convertible notes outstanding at October 31, 2014 was calculated with the following average assumptions, using a Black-Scholes option pricing model are as follows:

Significant Assumptions:
Risk free interest rate	Ranging from	0.039	%	to	0.074	%
Expected stock price volatility					140	%
Expected dividend payout					0
Expected options life in years	Ranging from	.22	year	to	.9	year

XML

NOTE D - NOTES PAYABLE (Details) - Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques (Warrant [Member])	6 Months Ended
	Oct. 31, 2014	Dec. 31, 2014
Minimum [Member]
Significant Assumptions:
Risk free interest rate	0.15%
Expected options life in years	54 days
Maximum [Member]
Significant Assumptions:
Risk free interest rate		1.02%
Expected stock price volatility		140.00%
Expected dividend payout		0.00%
Expected options life in years		3 years 62 days

XML

NOTE H - FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Oct. 31, 2014

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

The table below summarizes the fair values of financial liabilities as of October 31, 2014:

			Fair Value Measurement Using
	Fair Value at  October 31,  2014		Level 1		Level 2		Level 3
Derivative liabilities	$	755,571		-		-	$	755,571

Fair Value, Liabilities Measured on Recurring Basis [Table Text Block]

Changes in Derivative liability during the six months ended October 31, 2014 were:

			Increased		Decrease
	April 30,		During		in Fair		October 31,
	2014		Period		Value		2014
Derivative liability	$	601,000	$	465,047	$	310,476	$	755,571
Total	$	601,000	$	465,047	$	310,476	$	755,571

XML

NOTE A - SUMMARY OF ACCOUNTING POLICIES

6 Months Ended

Oct. 31, 2014

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

NOTE A – SUMMARY OF ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements as of October 31, 2014 and for the three and six month periods ended October 31, 2014 and 2013 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission, including Form 10-Q and Regulation S-K. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments), which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. The Company believes that the disclosures provided are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the audited financial statements and explanatory notes for the year ended April 30, 2014 as disclosed in the Company’s Form 10-K for that year as filed with the Securities and Exchange Commission.

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Specialty Reports, Inc. All significant inter-company transactions and balances have been eliminated in consolidation.

Business

Sparta Commercial Services, Inc. ("Sparta" "we," "us," or the "Company") is a Nevada corporation. We are a technology company that develop and market mobile app tools, products and services. We also provide vehicle history reports and a municipal leasing program.

Our roots are in the Powersports industry and our original focus was providing consumer and municipal financing to the powersports, recreational vehicle, and automobile industries (see Discontinued Operations). Presently, through our subsidiary, Specialty Reports, Inc. (SRI), we offer Mobile App development, sales, marketing and support, and Vehicle History Reports.

We have expanded our mobile application (mobile app) marketing efforts beyond vehicle dealers to a variety of businesses including, but not limited to, restaurants, hotels, and grocery stores. We also private label our mobile app framework to enable other businesses to offer custom apps to their customers.

Our vehicle history reports include Cyclechex (Motorcycle History Reports at www.cyclechex.com); RVchex (Recreational Vehicle History Reports at www.rvchex.com); CarVINreport (Automobile at www.carvinreport.com) and Truckchex (Heavy Duty Truck History Reports at www.truckchex.com). Our Vehicle History Reports are designed for consumers, retail dealers, auction houses, insurance companies and banks/finance companies.

Sparta also administers a Municipal Leasing Program for local and/or state agencies throughout the country who are seeking a better and more economical way to finance their essential equipment needs, including police motorcycles, cruisers, buses, and EMS equipment. We are continuing to expand our roster of equipment manufacturers and the types of equipment we lease.

The results of operations for the three and six months ended October31, 2014 are not necessarily indicative of the results to be expected for any other interim period or the full year ending April 30, 2015.

Estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Discontinued Operations

As discussed in NOTE C, in the second quarter of fiscal 2013, the Company’s Board of Directors approved management’s recommendation to discontinue the Company’s consumer lease and loan lines of business and the sale of all of the Company’s portfolio of performing RISCs, and a portion of its portfolio of leases. The sale was consummated in that quarter. The assets and liabilities have been accounted for as discontinued operations in the Company’s consolidated balance sheets for all periods presented. The operating results related to these lines of business have been included in discontinued operations in the Company’s consolidated statements of loss for all periods presented.

Revenue Recognition

Revenues from history report and mobile app products are recognized on a cash basis.

The Company’s leases, which are included in Discontinued Operations, are accounted for as either operating leases or direct financing leases.  At the inception of operating leases, no lease revenue is recognized and the leased motorcycles, together with the initial direct costs of originating the lease, which are capitalized, appear on the balance sheet as “motorcycles under operating leases-net”.  The capitalized cost of each motorcycle is depreciated over the lease term, on a straight-line basis, down to the Company’s original estimate of the projected value of the motorcycle at the end of the scheduled lease term (the “Residual”).  Monthly lease payments are recognized as rental income.

Direct financing leases are recorded at the gross amount of the lease receivable (principal amount of the contract plus the calculated earned income over the life of the contract), and the unearned income at lease inception is amortized over the lease term.

The Company’s Retail Installment Sales Contracts (“RISC”), which are included in Discontinued Operations,   are secured by liens on the titles to the vehicles.  The RISCs are accounted for as loans.  Upon purchase, the RISCs appear on the Company’s balance sheet as RISC loan receivable current and long term.  Interest income on these loans is recognized when it is earned. 

The Company realizes gains and losses as the result of the termination of leases, both at and prior to their scheduled termination, and the disposition of the related motorcycle.  The disposal of motorcycles, which reach scheduled termination of a lease, results in a gain or loss equal to the difference between proceeds received from the disposition of the motorcycle and its net book value.  Net book value represents the residual value at scheduled lease termination.  Lease terminations that occur prior to scheduled maturity as a result of the lessee’s voluntary request to purchase the vehicle have resulted in net gains, equal to the excess of the price received over the motorcycle’s net book value.

Early lease terminations also occur because of (i) a default by the lessee, (ii) the physical loss of the motorcycle, or (iii) the exercise of the lessee’s early termination.  In those instances, the Company receives the proceeds from either the resale or release of the repossessed motorcycle, or the payment by the lessee’s insurer.  The Company records a gain or loss for the difference between the proceeds received and the net book value of the motorcycle.

Inventories

Inventories are valued at the lower of cost or market, with cost determined using the first-in, first-out method and with market defined as the lower of replacement cost or realizable value.

Website Development Costs

The Company recognizes website development costs in accordance with Accounting Standards Codification (“ASC”) 350-50, "Accounting for Website Development Costs." As such, the Company expenses all costs incurred that relate to the planning and post implementation phases of development of its website. Direct costs incurred in the development phase are capitalized and recognized over the estimated useful life. Costs associated with repair or maintenance for the website are included in cost of net revenues in the current period expenses.

Cash Equivalents

For the purpose of the accompanying financial statements, all highly liquid investments with a maturity of three months or less are considered to be cash equivalents.

Income Taxes

Deferred income taxes are provided using the asset and liability method for financial reporting purposes in accordance with the provisions of ASC 740-10, "Accounting for Uncertainty in Income Taxes (“ASC 740-10”)." Under this method, deferred tax assets and liabilities are recognized for temporary differences between the tax bases of assets and liabilities and their carrying values for financial reporting purposes and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be removed or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.

ASC 740-10 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740-10 also provides guidance on derecognition, classification, treatment of interest and penalties, and disclosure of such positions. As a result of implementing ASC 740-10, there has been no adjustment to the Company’s financial statements and the adoption of ASC 740-10 did not have a material effect on the Company’s consolidated financial statements for the year ending April 30, 2014 or the three months or six months ended October 31, 2014.

Fair Value Measurements

The Company adopted ASC 820, “Fair Value Measurements (“ASC 820”).”  ASC 820 establishes a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets the lowest priority to unobservable inputs to fair value measurements of certain assets and Liabilities.  The three levels of the fair value hierarchy under ASC 820 are described below:

·   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.

This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. For some products or in certain market conditions, observable inputs may not always be available.

Impairment of Long-Lived Assets

In accordance ASC 360-10, “Impairment or Disposal of Long-Lived Assets,” long-lived assets, such as property, equipment, motorcycles and other vehicles and purchased intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows or quoted market prices in active markets if available, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

Comprehensive Income

In accordance with ASC 220-10, “Reporting Comprehensive Income,” (“ASC 220-10”) establishes standards for reporting and displaying of comprehensive income, its components and accumulated balances. Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, ASC 220-10 requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. At October 31, 2014 and April 30, 2014, the Company has no items of other comprehensive income.

Segment Information

The Company adopted ASC 280-10 “Disclosures about Segments of an Enterprise and Related Information,” “ASC 208-10”).  ASC 280-10 establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in consolidated financial reports issued to stockholders.  ASC 280-10 also establishes standards for related disclosures about products and services and geographic areas.  Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision making group, in making decisions how to allocate resources and assess performance.  The information disclosed herein, materially represents all of the financial information related to the Company's principal operating segments.

In the second quarter of fiscal 2013, the Company’s Board of Directors approved management’s recommendation to discontinue the Company’s consumer lease and loan lines of business and the sale of all of the Company’s portfolio of performing RISCs and a portion of its portfolio of leases. The sale was consummated in that quarter. The assets and liabilities have been accounted for as discontinued operations in the Company’s consolidated balance sheets for all periods presented. The operating results related to these lines of business have been included in discontinued operations in the Company’s consolidated statements of loss for all periods presented. As these lines of business were discontinued during the fiscal year ending April 30, 2013, the Company has discontinued segment reporting.

Stock Based Compensation

The Company adopted ASC 718-10, “Compensation-Stock Compensation Overall” (“ASC 718-10”), which records compensation expense on a straight-line basis, generally over the explicit service period of three to five years.

ASC 718-10 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s Consolidated Statement of Operations. The Company is using the Black-Scholes option-pricing model as its method of valuation for share-based awards. The Company’s determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to the Company’s expected stock price volatility over the term of the awards, and certain other market variables such as the risk free interest rate.

Concentrations of Credit Risk

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash, cash equivalents and receivables. The Company places its cash and temporary cash investments with high credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit.

Property and Equipment

Property and equipment are recorded at cost. Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful lives. Depreciation is calculated using the straight-line method over the estimated useful lives. Estimated useful lives of major depreciable assets are as follows:

Leasehold improvements	3 years
Furniture and fixtures	7 years
Website costs	3 years
Computer Equipment	5 years

Advertising Costs

The Company follows a policy of charging the costs of advertising to expenses incurred. During the six months ended October 31, 2014 and 2013, the Company incurred advertising costs of $3,819 and $8,500, respectively. During the three months ended October 31, 2014 and 2013, the Company incurred advertising expenses of zero and $4,250, respectively.

Net Loss Per Share

The Company uses ASC 260-10, “Earnings Per Share,” for calculating the basic and diluted loss per share. The Company computes basic loss per share by dividing net loss and net loss attributable to common shareholders by the weighted average number of common shares outstanding. Common equivalent shares are excluded from the computation of net loss per share if their effect is anti-dilutive.

Per share basic and diluted net loss attributable to common stockholders amounted to $0.05 and $0.05 for the three months ended October 31, 2014 and 2013, respectively, and $0.07 and $0.08 for the six months ended October 31, 2014 and 2013, respectively. At October 31, 2014 and 2013, 8,789,459 and 5,586,766 potential shares, respectively, were excluded from the shares used to calculate diluted earnings per share as their inclusion would reduce net loss per share.

Liquidity

As shown in the accompanying unaudited condensed consolidated financial statements, the Company has incurred a net loss attributed to common stockholders of $1,662,735 and $1,237,064 during the six months ended October 31, 2014 and October 31, 2013, respectively. The Company’s liabilities exceed its assets by $4,513,411 as of October 31, 2014.

Reclassifications

Certain reclassifications have been made to conform to prior periods' data to the current presentation. These reclassifications had no effect on reported losses.

Recent Accounting Pronouncements

There were various updates recently issued, most of which represented technical corrections to the accounting literature or applications to specific industries and are not expected to have a material impact on the Company’s unaudited condensed consolidated financial position, results of operations or cash flows.

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $)	Oct. 31, 2014	Apr. 30, 2014
Accumulated depreciation and amortization (in Dollars)	$ 201,160	$ 199,367
Beneficial Conversion Feature (in Dollars)	366,434	296,384
Preferred stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares designated	10,000,000	10,000,000
Common stock par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	740,000,000	740,000,000
Common stock, shares issued	24,397,250	20,987,353
Common stock, shares outstanding	24,397,250	20,987,353
Common stock to be issued	407,050	283,777
Series A Preferred Stock [Member]
Preferred stock, par value (in Dollars per share)	$ 100	$ 100
Preferred stock, shares designated	35,850	35,850
Preferred stock, shares issued	125	125
Preferred stock, shares outstanding	125	125
Series B Preferred Stock [Member]
Preferred stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares designated	1,000	1,000
Preferred stock, shares issued	67	157
Preferred stock, shares outstanding	67	157
Preferred stock, redemption value (in Dollars)	10,000	10,000
Preferred Stock, Shares to be Issued	29	72.48
Series C Preferred Stock [Member]
Preferred stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares designated	200,000	200,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Preferred stock, redemption value (in Dollars)	$ 10	$ 10

XML

NOTE K - GOING CONCERN MATTERS

6 Months Ended

Oct. 31, 2014

Going Concern Disclosure [Abstract]

Going Concern Disclosure [Text Block]

NOTE K– GOING CONCERN MATTERS

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  As shown in the accompanying unaudited condensed consolidated financial statements during the period July 1, 2004 (date of inception) through October 31, 2014, the Company incurred loss of $45,920,041.  Of these losses, $1,662,735 was incurred in the six months ending October 31, 2014.  These factors among others may indicate that the Company will be unable to continue as a going concern for a reasonable period of time.

The Company’s existence is dependent upon management’s ability to develop profitable operations.  Management is devoting substantially all of its efforts to developing its business and raising capital and there can be no assurance that the Company’s efforts will be successful.  However, there can be no assurance can be given that management’s actions will result in profitable operations or the resolution of its liquidity problems.  The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

In order to improve the Company’s liquidity, the Company’s management is actively pursuing additional equity financing through discussions with investment bankers and private investors.  There can be no assurance the Company will be successful in its effort to secure additional equity financing.

XML

Document And Entity Information	6 Months Ended
	Oct. 31, 2014	Dec. 15, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	SPARTA COMMERCIAL SERVICES, INC.
Document Type	10-Q
Current Fiscal Year End Date	--04-30
Entity Common Stock, Shares Outstanding		26,893,212
Amendment Flag	false
Entity Central Index Key	0000318299
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Oct. 31, 2014
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2

XML

Accounting Policies, by Policy (Policies)

6 Months Ended

Oct. 31, 2014

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements as of October 31, 2014 and for the three and six month periods ended October 31, 2014 and 2013 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission, including Form 10-Q and Regulation S-K. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments), which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. The Company believes that the disclosures provided are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the audited financial statements and explanatory notes for the year ended April 30, 2014 as disclosed in the Company’s Form 10-K for that year as filed with the Securities and Exchange Commission.

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Specialty Reports, Inc. All significant inter-company transactions and balances have been eliminated in consolidation.

Use of Estimates, Policy [Policy Text Block]

Estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Discontinued Operations, Policy [Policy Text Block]

Discontinued Operations

As discussed in NOTE C, in the second quarter of fiscal 2013, the Company’s Board of Directors approved management’s recommendation to discontinue the Company’s consumer lease and loan lines of business and the sale of all of the Company’s portfolio of performing RISCs, and a portion of its portfolio of leases. The sale was consummated in that quarter. The assets and liabilities have been accounted for as discontinued operations in the Company’s consolidated balance sheets for all periods presented. The operating results related to these lines of business have been included in discontinued operations in the Company’s consolidated statements of loss for all periods presented.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

Revenues from history report and mobile app products are recognized on a cash basis.

The Company’s leases, which are included in Discontinued Operations, are accounted for as either operating leases or direct financing leases.  At the inception of operating leases, no lease revenue is recognized and the leased motorcycles, together with the initial direct costs of originating the lease, which are capitalized, appear on the balance sheet as “motorcycles under operating leases-net”.  The capitalized cost of each motorcycle is depreciated over the lease term, on a straight-line basis, down to the Company’s original estimate of the projected value of the motorcycle at the end of the scheduled lease term (the “Residual”).  Monthly lease payments are recognized as rental income.

Direct financing leases are recorded at the gross amount of the lease receivable (principal amount of the contract plus the calculated earned income over the life of the contract), and the unearned income at lease inception is amortized over the lease term.

The Company’s Retail Installment Sales Contracts (“RISC”), which are included in Discontinued Operations,   are secured by liens on the titles to the vehicles.  The RISCs are accounted for as loans.  Upon purchase, the RISCs appear on the Company’s balance sheet as RISC loan receivable current and long term.  Interest income on these loans is recognized when it is earned. 

The Company realizes gains and losses as the result of the termination of leases, both at and prior to their scheduled termination, and the disposition of the related motorcycle.  The disposal of motorcycles, which reach scheduled termination of a lease, results in a gain or loss equal to the difference between proceeds received from the disposition of the motorcycle and its net book value.  Net book value represents the residual value at scheduled lease termination.  Lease terminations that occur prior to scheduled maturity as a result of the lessee’s voluntary request to purchase the vehicle have resulted in net gains, equal to the excess of the price received over the motorcycle’s net book value.

Early lease terminations also occur because of (i) a default by the lessee, (ii) the physical loss of the motorcycle, or (iii) the exercise of the lessee’s early termination.  In those instances, the Company receives the proceeds from either the resale or release of the repossessed motorcycle, or the payment by the lessee’s insurer.  The Company records a gain or loss for the difference between the proceeds received and the net book value of the motorcycle.

Inventory, Policy [Policy Text Block]

Inventories

Inventories are valued at the lower of cost or market, with cost determined using the first-in, first-out method and with market defined as the lower of replacement cost or realizable value.

Website Development Costs [Policy Text Block]

Website Development Costs

The Company recognizes website development costs in accordance with Accounting Standards Codification (“ASC”) 350-50, "Accounting for Website Development Costs." As such, the Company expenses all costs incurred that relate to the planning and post implementation phases of development of its website. Direct costs incurred in the development phase are capitalized and recognized over the estimated useful life. Costs associated with repair or maintenance for the website are included in cost of net revenues in the current period expenses.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash Equivalents

For the purpose of the accompanying financial statements, all highly liquid investments with a maturity of three months or less are considered to be cash equivalents.

Income Tax, Policy [Policy Text Block]

Income Taxes

Deferred income taxes are provided using the asset and liability method for financial reporting purposes in accordance with the provisions of ASC 740-10, "Accounting for Uncertainty in Income Taxes (“ASC 740-10”)." Under this method, deferred tax assets and liabilities are recognized for temporary differences between the tax bases of assets and liabilities and their carrying values for financial reporting purposes and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be removed or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.

ASC 740-10 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740-10 also provides guidance on derecognition, classification, treatment of interest and penalties, and disclosure of such positions. As a result of implementing ASC 740-10, there has been no adjustment to the Company’s financial statements and the adoption of ASC 740-10 did not have a material effect on the Company’s consolidated financial statements for the year ending April 30, 2014 or the three months or six months ended October 31, 2014.

Fair Value Measurement, Policy [Policy Text Block]

Fair Value Measurements

The Company adopted ASC 820, “Fair Value Measurements (“ASC 820”).”  ASC 820 establishes a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets the lowest priority to unobservable inputs to fair value measurements of certain assets and Liabilities.  The three levels of the fair value hierarchy under ASC 820 are described below:

·   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.

This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. For some products or in certain market conditions, observable inputs may not always be available.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Impairment of Long-Lived Assets

In accordance ASC 360-10, “Impairment or Disposal of Long-Lived Assets,” long-lived assets, such as property, equipment, motorcycles and other vehicles and purchased intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows or quoted market prices in active markets if available, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income

In accordance with ASC 220-10, “Reporting Comprehensive Income,” (“ASC 220-10”) establishes standards for reporting and displaying of comprehensive income, its components and accumulated balances. Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, ASC 220-10 requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. At October 31, 2014 and April 30, 2014, the Company has no items of other comprehensive income.

Segment Reporting, Policy [Policy Text Block]

Segment Information

The Company adopted ASC 280-10 “Disclosures about Segments of an Enterprise and Related Information,” “ASC 208-10”).  ASC 280-10 establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in consolidated financial reports issued to stockholders.  ASC 280-10 also establishes standards for related disclosures about products and services and geographic areas.  Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision making group, in making decisions how to allocate resources and assess performance.  The information disclosed herein, materially represents all of the financial information related to the Company's principal operating segments.

In the second quarter of fiscal 2013, the Company’s Board of Directors approved management’s recommendation to discontinue the Company’s consumer lease and loan lines of business and the sale of all of the Company’s portfolio of performing RISCs and a portion of its portfolio of leases. The sale was consummated in that quarter. The assets and liabilities have been accounted for as discontinued operations in the Company’s consolidated balance sheets for all periods presented. The operating results related to these lines of business have been included in discontinued operations in the Company’s consolidated statements of loss for all periods presented. As these lines of business were discontinued during the fiscal year ending April 30, 2013, the Company has discontinued segment reporting.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock Based Compensation

The Company adopted ASC 718-10, “Compensation-Stock Compensation Overall” (“ASC 718-10”), which records compensation expense on a straight-line basis, generally over the explicit service period of three to five years.

ASC 718-10 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s Consolidated Statement of Operations. The Company is using the Black-Scholes option-pricing model as its method of valuation for share-based awards. The Company’s determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to the Company’s expected stock price volatility over the term of the awards, and certain other market variables such as the risk free interest rate.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentrations of Credit Risk

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash, cash equivalents and receivables. The Company places its cash and temporary cash investments with high credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment

Property and equipment are recorded at cost. Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful lives. Depreciation is calculated using the straight-line method over the estimated useful lives. Estimated useful lives of major depreciable assets are as follows:

Leasehold improvements	3 years
Furniture and fixtures	7 years
Website costs	3 years
Computer Equipment	5 years

Advertising Costs, Policy [Policy Text Block]

Advertising Costs

The Company follows a policy of charging the costs of advertising to expenses incurred. During the six months ended October 31, 2014 and 2013, the Company incurred advertising costs of $3,819 and $8,500, respectively. During the three months ended October 31, 2014 and 2013, the Company incurred advertising expenses of zero and $4,250, respectively.

Earnings Per Share, Policy [Policy Text Block]

Net Loss Per Share

The Company uses ASC 260-10, “Earnings Per Share,” for calculating the basic and diluted loss per share. The Company computes basic loss per share by dividing net loss and net loss attributable to common shareholders by the weighted average number of common shares outstanding. Common equivalent shares are excluded from the computation of net loss per share if their effect is anti-dilutive.

Per share basic and diluted net loss attributable to common stockholders amounted to $0.05 and $0.05 for the three months ended October 31, 2014 and 2013, respectively, and $0.07 and $0.08 for the six months ended October 31, 2014 and 2013, respectively. At October 31, 2014 and 2013, 8,789,459 and 5,586,766 potential shares, respectively, were excluded from the shares used to calculate diluted earnings per share as their inclusion would reduce net loss per share.

Liquidity Disclosure [Policy Text Block]

Liquidity

As shown in the accompanying unaudited condensed consolidated financial statements, the Company has incurred a net loss attributed to common stockholders of $1,662,735 and $1,237,064 during the six months ended October 31, 2014 and October 31, 2013, respectively. The Company’s liabilities exceed its assets by $4,513,411 as of October 31, 2014.

Reclassification, Policy [Policy Text Block]

Reclassifications

Certain reclassifications have been made to conform to prior periods' data to the current presentation. These reclassifications had no effect on reported losses.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

There were various updates recently issued, most of which represented technical corrections to the accounting literature or applications to specific industries and are not expected to have a material impact on the Company’s unaudited condensed consolidated financial position, results of operations or cash flows.

XML

CONDENSED CONSOLIDATED STATEMENTS OF LOSSES (UNAUDITED) (USD $)	3 Months Ended		6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Revenue
Information technology	$ 138,074	$ 118,047	$ 270,881	$ 254,164
Cost of goods sold	48,470	38,715	86,047	76,291
Gross profit	89,604	79,333	184,834	177,872
Operating expenses:
General and administrative	685,680	363,382	1,217,394	711,829
Depreciation and amortization	897	357	1,793	2,778
Total operating expenses	686,578	363,739	1,219,188	714,607
Loss from continuing operations	(596,974)	(284,406)	(1,034,353)	(536,735)
Other (income) expense:
Other income	(5,011)	(17,691)	(15,779)	(38,195)
Interest expense and financing cost, net	159,810	88,088	246,651	186,121
Amortization of debt discount	189,324	120,451	314,065	195,942
(Gain) loss in changes in fair value of derivative liability	203,825	(27,403)	(8,704)	26,720
Total other expense	547,948	163,444	536,233	370,587
Net loss from continuing operations	(1,144,922)	(447,850)	(1,570,586)	(907,322)
Net loss from discontinued operations	(16,653)	(267,992)	(111,017)	(278,613)
Net Loss	(1,161,575)	(715,843)	(1,681,603)	(1,185,934)
Net loss attributed to non-controlling interest	7,460	18,304	19,251	27,969
Preferred dividend	(191)	(39,764)	(382)	(79,097)
Net loss attributed to common stockholders	$ (1,154,306)	$ (737,302)	$ (1,662,735)	$ (1,237,064)
Basic and diluted loss per share (in Dollars per share)	$ (0.05)	$ (0.03)	$ (0.07)	$ (0.06)
Basic and diluted loss per share attributed to common stockholders (in Dollars per share)	$ (0.05)	$ (0.05)	$ (0.07)	$ (0.08)
Weighted average shares outstanding (in Shares)	21,906,215	15,823,610	22,275,630	15,994,720

XML

NOTE F - EQUITY TRANSACTIONS

6 Months Ended

Oct. 31, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE F – EQUITY TRANSACTIONS

On May 18, 2013, the Company’s Board of Directors declared effective a one for seventy-five reverse common stock split. All per share amounts in these unaudited condensed consolidated financial statements and accompanying notes have been retroactively adjusted to the earliest period presented for the effect of this reverse stock split.

The Company is authorized to issue 10,000,000 shares of preferred stock with $0.001 par value per share, of which 35,850 shares have been designated as Series A convertible preferred stock with a $100 stated value per share, 1,000 shares have been designated as Series B Preferred Stock with a $10,000 per share liquidation value, and 200,000 shares have been designated as Series C Preferred Stock with a $10 per share liquidation value, and 740,000,000 shares of common stock with $0.001 par value per share.  The Company had 125 shares of Series A preferred stock issued and outstanding as of October 31, 2014 and April 30, 2014.  The Company had 67 and 157 shares of Series B preferred stock issued and outstanding as of October 31, 2014 and April 30, 2014 respectively.  The Company had nil shares of Series C preferred stock issued and outstanding as of October 31, 2014 and April 30, 2014.  The Company has 24,397,250 and 20,987,353 shares of common stock issued and outstanding as of October 31, 2014 and April 30, 2014, respectively.

Preferred Stock, Series A

During the six months ended October 31, 2014, there were no transactions in Series A Preferred, however, at October 31, 2014, there were $7,186 of accrued dividends payable on the Series A Preferred, compared to the accrual of $6,803 at April 30, 2014.  At the Company’s option, these dividends may be paid in shares of the Company’s Common Stock.

Preferred Stock, Series B

During the six months ended October 31, 2014, pursuant to the terms of the Series B Preferred Stock, the Company redeemed 90 shares of Series B Preferred Stock and 43.11 shares of to be issued Series B Preferred Stock by exchanging the shares for $1,215,000 of note subscription receivables and $116,107 of interest receivable thereon. Subsequent to this redemption there were 67 shares of Series B Preferred Stock outstanding and there were 29.37 shares of Series B Preferred Stock payable.

Preferred Stock Series C

There were no shares of Series C Preferred Stock issued and outstanding at October 31, 2014 and at April 30, 2014.

Common Stock

During the six months ended October 31, 2014, the Company expensed $204,388 for non-cash charges related to stock and option compensation expense.

During the six months ended October 31, 2014, the Company:

●  sold 2,038,519 shares of common stock to eighteen accredited investors for $497,479, of which 185,900 shares remained to be issued at October 31, 2014 and 101,877 shares were classified as to be issued at April 30, 2014,

●  issued 888,365 shares of common stock upon the conversion of convertible notes and accrued interest in the amount of $325,463, of which 122,451 shares were classified as to be issued at April 30, 2014 and 153,910 shares remained to be issued at October 31, 2014,

●  issued 207,787 shares of common stock valued at $60,619 pursuant to terms of various notes of which 60,000 shares remained to be issued at October 31, 2014, and issued 16,666 shares were classified as to be issued at April 30, 2014.,

● issued 240,109 shares of common stock valued at $126,928 pursuant to consulting agreements,

● issued 138,160 shares of common stock in payment of $47,064 in accounts payable of which 20,000 shares were classified as to be issued at April 30, 2014, and

● issued 31,780 shares of common stock valued at $14,269 to three employees in exchange for their outstanding stock purchase options.

XML

NOTE E - LOANS PAYABLE TO RELATED PARTIES

6 Months Ended

Oct. 31, 2014

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

NOTE E – LOANS PAYABLE TO RELATED PARTIES

As of October 31, 2014 and April 30, 2014, aggregated loans payable, without demand and with no interest, to officers and directors were $385,853 and $385,853, respectively. 

XML

NOTE G - NONCONTROLLING INTEREST (Tables)

6 Months Ended

Oct. 31, 2014

Noncontrolling Interest [Abstract]

Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Table Text Block]

For the six months ended October 31, 2014, the non-controlling interest is summarized as follows:

	Amount
Balance at April 30, 2014	$	669,424
Noncontrolling interest’s share of losses		(19,251	)
Balance at October 31, 2014	$	650,173

XML

NOTE A - SUMMARY OF ACCOUNTING POLICIES (Tables) (Estimated Useful Lives [Member])

6 Months Ended

Oct. 31, 2014

Estimated Useful Lives [Member]

NOTE A - SUMMARY OF ACCOUNTING POLICIES (Tables) [Line Items]

Property, Plant and Equipment [Table Text Block]

Estimated useful lives of major depreciable assets are as follows:

Leasehold improvements	3 years
Furniture and fixtures	7 years
Website costs	3 years
Computer Equipment	5 years

XML

NOTE I - NON-CASH FINANCIAL INFORMATION

6 Months Ended

Oct. 31, 2014

Disclosure Text Block Supplement [Abstract]

Additional Financial Information Disclosure [Text Block]

NOTE I – NON-CASH FINANCIAL INFORMATION

During the six months ended October 31, 2014, the Company:

●  issued 888,365 shares of common stock upon the conversion of  convertible notes and accrued interest in the amount of $325,463, of which 122,451 shares were classified as to be issued at April 30, 2014 and 153,910 shares remained to be issued at October 31, 2014,

●  issued 156,644 shares of common stock valued at $60,619 pursuant to terms of various notes of which 16,666 were classified as to be issued at April 30, 2014 and 60,000 shares remained to be issued at October 31, 2014, and

● issued 138,160 shares of common stock in payment of $47,064 in accounts payable of which 20,000 shares were classified as to be issued at April 30, 2014.

XML

NOTE G - NONCONTROLLING INTEREST

6 Months Ended

Oct. 31, 2014

Noncontrolling Interest [Abstract]

Noncontrolling Interest Disclosure [Text Block]

NOTE G – NONCONTROLLING INTEREST

For the six months ended October 31, 2014, the non-controlling interest is summarized as follows:

	Amount
Balance at April 30, 2014	$	669,424
Noncontrolling interest’s share of losses		(19,251	)
Balance at October 31, 2014	$	650,173

XML

NOTE H - FAIR VALUE MEASUREMENTS

6 Months Ended

Oct. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

NOTE H – FAIR VALUE MEASUREMENTS

The Company follows the guidance established pursuant to ASC 820 which established a framework for measuring fair value and expands disclosure about fair value measurements. ASC 820 defines fair value as the amount that would be received for an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes the following three levels of inputs that may be used:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets and liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data.

Level 3: Unobservable inputs when there is little or no market data available, thereby requiring an entity to develop its own assumptions. The fair value hierarchy gives the lowest priority to Level 3 inputs.

The table below summarizes the fair values of financial liabilities as of October 31, 2014:

			Fair Value Measurement Using
	Fair Value at  October 31,  2014		Level 1		Level 2		Level 3
Derivative liabilities	$	755,571		-		-	$	755,571

The following is a description of the valuation methodologies used for these items:

Derivative liability — these instruments consist of certain variable conversion features related to notes payable obligations and certain outstanding warrants. These instruments were valued using pricing models which incorporate the Company’s stock price, volatility, U.S. risk free rate, dividend rate and estimated life.

The Company did not identify any other non-recurring assets and liabilities that are required to be presented in the balance sheets at fair value in accordance with ASC Topic 825 “The Fair Value Option for Financial Issuances”.

Changes in Derivative liability during the six months ended October 31, 2014 were:

			Increased		Decrease
	April 30,		During		in Fair		October 31,
	2014		Period		Value		2014
Derivative liability	$	601,000	$	465,047	$	310,476	$	755,571
Total	$	601,000	$	465,047	$	310,476	$	755,571

XML

NOTE J - SUBSEQUENT EVENTS

6 Months Ended

Oct. 31, 2014

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE J – SUBSEQUENT EVENTS

During November and through December 19, 2014, the Company:

Issued 605,179 shares of common stock upon the conversion of $76,020 of notes and accrued interest thereon.

· Sold 1,193,288 shares of common stock to four accredited investors for $123,400.

· Issued 123,813 shares valued at $20,567 pursuant to the terms of notes.

·   Issued 362,000 shares of common stock valued at $109,990 to a consultant.

·   Issued 211,682 shares listed as to be issued at October 31, 2014.

·   Borrowed pursuant to a $55,125, 8% note due December 12, 2015.  The note is convertible at the note holder’s option at  a variable conversion of 60% multiplied by the average of the three closing prices in the fifteen 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. This lender has committed to lend the Company an additional $52,500 under the same terms on or before August 9, 2015 so long as the Company continues to meet the current information requirements under Rule 144 of the Securities Act of 1933, as amended.

·   Borrowed pursuant to a $33,000, 8% note due August 19, 2015. The note is convertible at the note holder’s option at a variable conversion price of 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”).

·   Borrowed $55,000 pursuant to a $220,000, 10% note due November 24, 2015. The note holder has the right but not the obligation, subject to the Company’s agreement, to advance the remaining $165,000 balance of the note on or before the due date. The note is convertible at the note holder’s option at a variable conversion prices of 58% multiplied by the lowest closing price for the common stock during the five 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”).

Borrowed $65,000 pursuant to a $100,000, 8% secured note due July 31, 2016, and re-classed $35,000 of existing debt due this note holder into this note. The Company issued this note holder 100,000 shares of common stock as inducement for this loan. The note is secured by a $76,610 security deposit.

XML

NOTE D - NOTES PAYABLE (Details) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended		6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013	Apr. 30, 2014	Apr. 30, 2012	Oct. 30, 2014
NOTE D - NOTES PAYABLE (Details) [Line Items]
Amortization of Debt Discount (Premium)	$ 189,324	$ 120,451	$ 314,065	$ 195,942	$ 417,291
Derivative Liability	755,571		755,571		601,000
Derivative, Gain (Loss) on Derivative, Net	(203,825)	27,403	8,704	(26,720)
Debt [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Increase (Decrease) in Derivative Liabilities			221,450
Derivative Liability	583,800		583,800
Adjustments to Additional Paid in Capital, Convertible Debt with Conversion Feature			81,821
Warrant [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Increase (Decrease) in Derivative Liabilities			66,878
Derivative Liability	171,771		171,771
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #1 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	1,258,368		1,258,368
Debt Instrument, Interest Rate, Stated Percentage	8.00%		8.00%
Debt Instrument, Maturity Date			Apr. 30, 2013
Debt Instrument, Convertible, Conversion Price (in Dollars per share)	$ 0.495		$ 0.495
Debt Instrument, Convertible, Beneficial Conversion Feature						663,403
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #2 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	56,500		56,500
Debt Instrument, Interest Rate, Stated Percentage	6.00%		6.00%
Debt Instrument, Maturity Date			Jun. 30, 2015
Debt Instrument, Convertible, Beneficial Conversion Feature			56,500
Debt Instrument, Convertible, Terms of Conversion Feature			The note is 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”).
Common Stock, Capital Shares Reserved for Future Issuance (in Shares)	1,356,993		1,356,993
Debt Instrument, Default Interest Rate, Percentage	18.00%		18.00%
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #3 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	25,000		25,000
Debt Instrument, Interest Rate, Stated Percentage	12.00%		12.00%
Debt Instrument, Maturity Date			May 27, 2014
Debt Instrument, Convertible, Conversion Price (in Dollars per share)	$ 0.59		$ 0.59
Debt Instrument, Description			If the Company has not redeemed the outstanding principal and accrued interest of this Debenture in cash by the Maturity Date and the original Debenture between the Holder and the Company dated September 19, 2007 is no longer outstanding for every 30 day period past the Maturity Date of which the principal balance an any accrued interest of this Debenture remain outstanding, the Company shall issue the Holder the greater of (i) 1,333 shares of the Company’s restricted common stock or (ii) the number of shares of the Company’s restricted common stock equal to $2,000 determined on the basis of the volume weighted average closing price “VWACP” of the Company’s common stock for the five consecutive trading days immediately prior to the 19th of each month (for a day to be included in the calculation, there must have been at least 100 shares traded on that day). As long as the Company remains current on the payment of the shares under this Paragraph 12, the Debenture shall be considered past due but not in default.
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in Shares)			5,000
Convertible Notes Payable [Member] | Additional Note Issued with Note Convertible at Holder's Option #3 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	50,000		50,000
Debt Instrument, Interest Rate, Stated Percentage	12.00%		12.00%
Debt Instrument, Maturity Date			Mar. 20, 2015
Debt Instrument, Convertible, Conversion Price (in Dollars per share)	$ 0.59		$ 0.59
Debt Instrument, Convertible, Beneficial Conversion Feature						50,000
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in Shares)					10,000
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #4 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	118,250		118,250
Debt Instrument, Interest Rate, Stated Percentage	8.00%		8.00%
Debt Instrument, Maturity Date			Aug. 15, 2015
Debt Instrument, Convertible, Conversion Price (in Dollars per share)	$ 0.25		$ 0.25
Debt Instrument, Convertible, Beneficial Conversion Feature						5,340
Number of Notes			7
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum			15.00%
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Maximum			20.00%
Debt Instrument, Monthly Penalty Shares (in Shares)			667
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #5 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	106,250		106,250
Debt Instrument, Maturity Date			Aug. 15, 2015
Debt Instrument, Convertible, Conversion Price (in Dollars per share)	$ 0.25		$ 0.25
Debt Instrument, Convertible, Beneficial Conversion Feature						6,120
Number of Notes			3
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum			20.00%
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Maximum			25.00%
Accrued Interest, Monthly Compounding Interest Rate			8.00%
Convertible Notes Payable [Member] | Notes Convertible at Holder's Option #6 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	59,000		59,000
Debt Instrument, Interest Rate, Stated Percentage	5.00%		5.00%
Debt Instrument, Convertible, Beneficial Conversion Feature			39,784
Debt Instrument, Convertible, Terms of Conversion Feature			The Conversion Price is the lesser of $1.20 or 70% of the average of the three lowest closing prices during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company (In the case that conversion shares are not deliverable by DWAC an additional 5% discount will apply; and if the shares are chilled for deposit into the DTC system and only eligible for Xclearing deposit an additional 7.5% discount shall apply).  Unless otherwise agreed in writing by both parties, at no time will the lender convert any amount of this note into common stock that would result in the lender owning more than 4.99% of the common stock outstanding. In fiscal 2014, the Company has recorded a $39,784 beneficial conversion discount for the note. The discount is being fully amortized over the initial term of the note;(vii)                          a $13,720 outstanding balance of a  $27,500, 5% convertible note due October 21, 2014,  a $27,500, 5% convertible note due January 28, 2015 and a $27,500, 5% convertible note due April 29, 2015. This lender has committed to lend up to $165,000. 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 borrower 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 previous to the day the conversion notice is delivered to the Company. (In the case that conversion shares are not deliverable by DWAC, the principal amount of the note shall be increased by $10,000, and the conversion price shall be redefined to equal the lesser of (a) $0.60 or (b) 50% of the lowest closing price during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company).  Unless otherwise agreed in writing by both parties, at no time will the lender convert any amount of this note into common stock that would result in the lender owning more than 4.99% of the common stock outstanding.
Debt Instrument, Description			This lender has committed to lend up to $330,000 (three hundred thousand) in the form of a $165,000 note. 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 borrower is only required to repay the amount funded and the Company is not required to repay any unfunded portion of this note. The second note has been amended to include a 3% closing fee on the amount of each sum advanced plus a 5% due diligence fee on the amount of each sum advanced. The combined fees shall be added to the sum advanced for all purposes under the Note, including when calculating the amount of the interest charge. The maturity date 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 is the lesser of $1.20 or 70% of the average of the three lowest closing prices during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company (In the case that conversion shares are not deliverable by DWAC an additional 5% discount will apply; and if the shares are chilled for deposit into the DTC system and only eligible for Xclearing deposit an additional 7.5% discount shall apply).  Unless otherwise agreed in writing by both parties, at no time will the lender convert any amount of this note into common stock that would result in the lender owning more than 4.99% of the common stock outstanding. In fiscal 2014, the Company has recorded a $39,784 beneficial conversion discount for the note. The discount is being fully amortized over the initial term of the note;(vii)                          a $13,720 outstanding balance of a  $27,500, 5% convertible note due October 21, 2014,  a $27,500, 5% convertible note due January 28, 2015 and a $27,500, 5% convertible note due April 29, 2015. This lender has committed to lend up to $165,000. The lender may lend additional consideration to the Company in such amounts and at such dates as Lender may choose in its sole discretion.
Debt Instrument, Amendment Description			The second note has been amended to include a 3% closing fee on the amount of each sum advanced plus a 5% due diligence fee on the amount of each sum advanced. The combined fees shall be added to the sum advanced for all purposes under the Note, including when calculating the amount of the interest charge.
Debt Instrument, Maturity Date, Description			The maturity date 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.
Convertible Notes Payable [Member] | Notes Convertible at Holder's Option #7-A [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	27,500		27,500
Debt Instrument, Interest Rate, Stated Percentage	5.00%		5.00%
Debt Instrument, Maturity Date			Oct. 21, 2014
Convertible Notes Payable	13,720		13,720
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #7-B [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	27,500		27,500
Debt Instrument, Interest Rate, Stated Percentage	5.00%		5.00%
Debt Instrument, Maturity Date			Jan. 28, 2015
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #7-C [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	27,500		27,500
Debt Instrument, Interest Rate, Stated Percentage	5.00%		5.00%
Debt Instrument, Maturity Date			Apr. 29, 2015
Convertible Notes Payable [Member] | Notes Convertible at Holder's Option #7 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Convertible, Beneficial Conversion Feature			49,085
Debt Instrument, Convertible, Terms of Conversion Feature			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 previous to the day the conversion notice is delivered to the Company. (In the case that conversion shares are not deliverable by DWAC, the principal amount of the note shall be increased by $10,000, and the conversion price shall be redefined to equal the lesser of (a) $0.60 or (b) 50% of the lowest closing price during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company).
Debt Instrument, Description			This lender has committed to lend up to $165,000. The lender may lend additional consideration to the Company in such amounts and at such dates as Lender may choose in its sole discretion.
Debt Instrument, Payment Terms			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.
Convertible Notes Payable [Member] | Notes Convertible at Holder's Option #7-D [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	13,900		13,900
Debt Instrument, Interest Rate, Stated Percentage	10.00%		10.00%
Debt Instrument, Maturity Date			Jun. 01, 2014
Debt Instrument, Convertible, Beneficial Conversion Feature							11,158
Debt Instrument, Convertible, Terms of Conversion Feature			Conversion Price for this note is the lesser of $0.50 or 70% of the lowest closing prices during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company. (In the case that conversion shares are not deliverable by DWAC, the principal amount of the note shall be increased by $15,000, and the conversion price shall be redefined to equal the lesser of (a) $0.005 or (b) 50% of the lowest closing prices during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company).
Convertible Notes Payable, Current	500		500
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #7-E [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount							60,000
Debt Instrument, Interest Rate, Stated Percentage							12.00%
Debt Instrument, Maturity Date							Mar. 20, 2015
Debt Instrument, Convertible, Beneficial Conversion Feature			32,309
Debt Instrument, Convertible, Terms of Conversion Feature			The Conversion Price for this note is 65% of the lowest closing price during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company. (In the case that conversion shares are not deliverable by DWAC, the principal amount of the note shall be increased by $15,000, and the conversion price shall be redefined to equal the lesser of (a) $0.005 or (b) 50% of the lowest closing price during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company).
Convertible Notes Payable, Current							625
Convertible Notes Payable [Member] | Notes Convertible at Holder's Option #8-A [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	55,000		55,000
Debt Instrument, Interest Rate, Stated Percentage	8.00%		8.00%
Debt Instrument, Maturity Date			Feb. 25, 2015
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #8-B [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	55,000		55,000
Debt Instrument, Maturity Date			Apr. 27, 2015
Convertible Notes Payable [Member] | Notes Convertible at Holder's Option #8 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Convertible, Beneficial Conversion Feature			99,161
Debt Instrument, Convertible, Terms of Conversion Feature			convertible at a 40% discount from the lowest closing price for the twenty trading days prior to conversion.
Common Stock, Capital Shares Reserved for Future Issuance (in Shares)	918,000		918,000
Debt Instrument, Debt Default, Description of Violation or Event of Default			In the event the note is not paid when due, the interest rate is increased to fifteen percent until the notes are paid in full
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #9-A [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	42,500		42,500
Debt Instrument, Interest Rate, Stated Percentage	8.00%		8.00%
Debt Instrument, Maturity Date			Feb. 02, 2015
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #9-B [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	37,500		37,500
Debt Instrument, Interest Rate, Stated Percentage	8.00%		8.00%
Debt Instrument, Maturity Date			Apr. 27, 2015
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #9-C [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	32,500		32,500
Debt Instrument, Interest Rate, Stated Percentage	8.00%		8.00%
Debt Instrument, Maturity Date			Jun. 03, 2015
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #9-D [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	33,000		33,000
Debt Instrument, Interest Rate, Stated Percentage	8.00%		8.00%
Debt Instrument, Convertible, Beneficial Conversion Feature			114,215
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #9 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Convertible, Terms of Conversion Feature			The 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”).
Common Stock, Capital Shares Reserved for Future Issuance (in Shares)	2,900,000		2,900,000
Debt Instrument, Debt Default, Description of Violation or Event of Default			In the event the note is not paid when due, the interest rate is increased to twenty-two percent until the note is paid in full
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #10 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	40,000		40,000
Debt Instrument, Interest Rate, Stated Percentage	6.00%		6.00%
Debt Instrument, Convertible, Beneficial Conversion Feature			20,085
Debt Instrument, Convertible, Terms of Conversion Feature			The note is convertible at the note holder’s option at the lesser of $1.20 or a variable conversion of 65% multiplied by the lowest VWAP in the five 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”).
Common Stock, Capital Shares Reserved for Future Issuance (in Shares)	310,000		310,000
Convertible Notes Payable	20,000		20,000
Debt Instrument, Debt Default, Description of Violation or Event of Default			In the event the note is not paid when due, the interest rate is increased to twenty-two percent until the note is paid in full
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #11 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	44,770		44,770
Debt Instrument, Interest Rate, Stated Percentage	5.00%		5.00%
Debt Instrument, Convertible, Beneficial Conversion Feature			35,816
Debt Instrument, Convertible, Terms of Conversion Feature			The note is convertible at the note holder’s option at the rate of 1.5 shares of common stock for each dollar converted.
Debt Instrument, Default Interest Rate, Percentage	18.00%		18.00%
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #12-A [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	50,000		50,000
Debt Instrument, Interest Rate, Stated Percentage	8.00%		8.00%
Debt Instrument, Maturity Date			Dec. 20, 2014
Debt Instrument, Convertible, Beneficial Conversion Feature			36,207
Debt Instrument, Convertible, Terms of Conversion Feature			The note is convertible at the note holder’s option at  a variable conversion of 58% multiplied by the average of three lowest trades 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”).
Common Stock, Capital Shares Reserved for Future Issuance (in Shares)	340,000		340,000
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #12-B [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	55,000		55,000
Debt Instrument, Interest Rate, Stated Percentage	12.00%		12.00%
Debt Instrument, Maturity Date			Feb. 19, 2015
Debt Instrument, Convertible, Beneficial Conversion Feature			48,015
Debt Instrument, Convertible, Terms of Conversion Feature			The note is convertible at the note holder’s option at  a variable conversion of 58% multiplied by the average of the three lowest trades 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”).
Common Stock, Capital Shares Reserved for Future Issuance (in Shares)	325,000		325,000
Convertible Notes Payable [Member] | Interest Only Note Convertible at Company's Option #1 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	10,000		10,000
Debt Instrument, Interest Rate, Stated Percentage	22.00%		22.00%
Debt Instrument, Maturity Date			May 31, 2015
Convertible Notes Payable [Member] | Interest Only Note Convertible at Company's Option #2 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	25,000		25,000
Debt Instrument, Maturity Date			Oct. 31, 2013
Debt Instrument, Convertible, Conversion Price (in Dollars per share)	$ 1.50		$ 1.50
Debt Instrument, Monthly Penalty Shares (in Shares)			3,333
Convertible Notes Payable [Member] | Interest Only Note Convertible at Company's Option #3 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	315,000		315,000
Debt Instrument, Interest Rate, Stated Percentage	12.462%		12.462%
Debt Instrument, Payment Terms			Interest is payable quarterly with a minimum or $600 in cash with the balance payable in cash or stock at the Company’s options calculated as the volume weighted average price of the Company’s common stock for the ten day trading period immediately preceding the last day of each three month period
Convertible Notes Payable [Member] | Interest Only Note Convertible at Company's Option #4 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	25,000		25,000
Debt Instrument, Interest Rate, Stated Percentage	8.00%		8.00%
Debt Instrument, Convertible, Conversion Price (in Dollars per share)	$ 0.35		$ 0.35
Debt Instrument, Payment Terms			May 31, 2015
Stock Issued During Period, Shares, Other (in Shares)			5,000
Convertible Notes Payable [Member] | Interest Only Note Convertible at Company's Option #5 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	15,000		15,000
Debt Instrument, Interest Rate, Stated Percentage	5.00%		5.00%
Debt Instrument, Maturity Date			May 31, 2015
Stock Issued During Period, Shares, Other (in Shares)			5,000
Loans Payable [Member] | Note Payable #1 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	25,000		25,000
Debt Instrument, Interest Rate, Stated Percentage	0.00%		0.00%
Debt Instrument, Maturity Date			May 31, 2015
Stock Issued During Period, Shares, Other (in Shares)			1,000
Loans Payable [Member] | Notes Payable #2 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	75,000		75,000
Debt Instrument, Interest Rate, Stated Percentage	20.00%		20.00%
Debt Instrument, Maturity Date			Mar. 18, 2015
Stock Issued During Period, Shares, Other (in Shares)			106,700
Debt Instrument, Collateral			secured by 640,197 shares of the Company’s restricted common stock
Loans Payable [Member] | Note Payable #3 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	20,000		20,000
Debt Instrument, Interest Rate, Stated Percentage	8.00%		8.00%
Debt Instrument, Maturity Date			Jan. 05, 2015
Number of Notes			2
Debt Instrument, Debt Default, Description of Violation or Event of Default			In case of default the interest rate is increased to eighteen percent and the Company shall issue each noteholder 10,000 shares of its restricted common stock for every ten day period the notes remain unpaid.
Debt Instrument, Collateral Amount	37,401		37,401
Loans Payable [Member] | Note Payable #4 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	$ 40,000		$ 40,000
Debt Instrument, Interest Rate, Stated Percentage	8.00%		8.00%
Debt Instrument, Maturity Date			Dec. 31, 2014
Stock Issued During Period, Shares, Other (in Shares)			10,000

XML

NOTE C - DISCONTINUED OPERATIONS (Tables) (Consumer Lease and Loan Lines of Business [Member])

6 Months Ended

Oct. 31, 2014

Consumer Lease and Loan Lines of Business [Member]

NOTE C - DISCONTINUED OPERATIONS (Tables) [Line Items]

Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block]

The following table presents summarized operating results for those discontinued operations.

	Six Months Ended
	October 31,			October 31,
	2014			2013
Revenues	$	23,163		$	58,997
Net (loss)	$	(111,017	)	$	(278,613	)

Schedule of Property Subject to or Available for Operating Lease [Table Text Block]

Motorcycles and other vehicles under operating leases at October 31, 2014 and April 30, 2014:

	October 31,			April 30,
	2014			2014
Motorcycles and other vehicles	$	33,518		$	60,686
Less: accumulated depreciation		(3,525	)		(3,986	)
Motorcycles and other vehicles, net of accumulated depreciation		29,992			56,700
Less: estimated reserve for residual values		(957	)		(1,030	)
Motorcycles and other vehicles under operating leases, net	$	29,036		$	55,670

Schedule of Short-term Debt [Table Text Block]

	October 31,		April 30,
	2014		2014
Secured, subordinated  individual lender (a)	$	85,385	$	117,508
Secured, subordinated individual lender (b)		12,080		12,912
Total	$	97,465	$	130,420

Schedule of Maturities of Long-term Debt [Table Text Block]

At October 31, 2014, the notes payable mature as follows:

Year ended October 31,	Amount
2015	$	97,465
Total Due	$	97,465

XML

NOTE A - SUMMARY OF ACCOUNTING POLICIES (Details) - Schedule of Estimated Useful Lives of Property and Equipment	6 Months Ended
	Oct. 31, 2014
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Useful Lives	3 years
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Useful Lives	7 years
Website Costs [Member]
Property, Plant and Equipment [Line Items]
Useful Lives	3 years
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Useful Lives	5 years

XML

NOTE G - NONCONTROLLING INTEREST (Details) - Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net (USD $)	3 Months Ended		6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Balance at April 30, 2014			$ 669,424
Noncontrolling interest’s share of losses	(7,460)	(18,304)	(19,251)	(27,969)
Balance at October 31, 2014	650,173		650,173
Specialty Reports Inc. [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Balance at April 30, 2014			669,424
Noncontrolling interest’s share of losses			(19,251)
Balance at October 31, 2014		$ 650,173		$ 650,173

XML

CONDENSED CONSOLIDATED STATEMENT OF EQUITY (DEFICIT) (UNAUDITED) (USD $)	Series A Preferred Stock [Member]	Series B Preferred Stock [Member]	Series B Preferred Stock to be Issued [Member]	Common Stock [Member]	Common Stock To Be Issued [Member]	Stock Subscribed [Member]	Receivables from Stockholder [Member]	Deferred Compensation, Share-based Payments [Member]	Additional Paid-in Capital [Member]	Total
Balance at Apr. 30, 2014	$ 12,500	$ 1,570	$ 72	$ 20,987	$ 284	$ (2,118,309)	$ 41,738,613	$ (44,257,306)	$ 669,424	$ (3,932,164)
Balance (in Shares) at Apr. 30, 2014	125	157	0	20,987,353	283,777
Correcting					(1)		15			14
Correcting (in Shares)				345	(430)
Redemption of preferred B stock		(900)	(43)			1,215,000	(1,330,164)			(116,107)
Redemption of preferred B stock (in Shares)		(90)
Derivative liability reclassification							81,821			81,821
Sale of common stock				1,955	84		495,439			497,479
Sale of common stock (in Shares)				1,954,496	84,023
Shares issued for financing cost				157	(31)		60,493			60,619
Shares issued for financing cost (in Shares)				156,644	(31,778)
Shares issued for conversion of notes, interest and accounts payable				1,026	11		371,490			372,527
Shares issued for conversion of notes, interest and accounts payable (in Shares)				1,026,523	11,458
Stock compensation				240	60		126,628			126,928
Stock compensation (in Shares)				240,109	60,000
Employee stock & options expense & revaluation				32			77,428			77,460
Employee stock & options expense & revaluation (in Shares)				31,780
Net loss								(1,662,735)	(19,251)	(1,681,986)
Balance at Oct. 31, 2014	$ 12,500	$ 670	$ 29	$ 24,397	$ 407	$ (903,309)	$ 41,621,763	$ (45,920,041)	$ 650,173	$ (4,513,411)
Balance (in Shares) at Oct. 31, 2014	125	67	0	24,397,250	407,050

XML

NOTE D - NOTES PAYABLE

6 Months Ended

Oct. 31, 2014

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

NOTE D – NOTES PAYABLE

Notes Payable	October 31, 2014			April 30, 2014
Notes convertible at holder’s option (a)	$	2,167,358		$	1,901,263
Notes with interest only convertible at Company’s option (b)		390,000			390,000
Non-convertible notes payable (c)		180,000			25,000
Subtotal		2,737,357			2,316,263
Less, Debt discount		(366,434	)		(296,384	)
Total	$	2,370,923		$	2,019,879

 (a) Notes convertible at holder’s option consists of:

(i)                             a $1,258,368, 8% note originally due April 30, 2013, but subsequently amended to such time as the law suit filed by the Company (see: PART II, ITEM 1 LEGAL PROCEEDINGS) is fully adjudicated, convertible at the holder’s option at $0.495 per share. In fiscal 2012, the Company had recorded a $663,403 beneficial conversion discount for this note which was fully amortized during fiscal 2013; 

(ii)                            a $56,500, 6% note due June 30, 2015. The Company has recorded beneficial conversion discounts totaling $56,500 for the note. The discount is being fully amortized over the terms of the note.   The note is 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”). The Company had reserved up to 1,356,993 shares of its common stock for conversion pursuant to the terms of the note.  In the event the note is not paid when due, the interest rate is increased to eighteen percent until the note is paid in full;

(iii)                           a $25,000, 12% convertible note due May 27, 2014. The note is convertible at $0.59 per share. If the Company has not redeemed the outstanding principal and accrued interest of this Debenture in cash by the Maturity Date and the original Debenture between the Holder and the Company dated September 19, 2007 is no longer outstanding for every 30 day period past the Maturity Date of which the principal balance an any accrued interest of this Debenture remain outstanding, the Company shall issue the Holder the greater of (i) 1,333 shares of the Company’s restricted common stock or (ii) the number of shares of the Company’s restricted common stock equal to $2,000 determined on the basis of the volume weighted average closing price “VWACP” of the Company’s common stock for the five consecutive trading days immediately prior to the 19th of each month (for a day to be included in the calculation, there must have been at least 100 shares traded on that day). As long as the Company remains current on the payment of the shares under this Paragraph 12, the Debenture shall be considered past due but not in default. The Company issued the holder 5,000 shares of its restricted common stock as inducement for the loan and a $50,000, 12% note, due March 20, 2015, convertible at the holder’s option at $0.59 per share), the Company issued the holder 10,000 shares of its restricted common stock as inducement for the loan. In fiscal 2012, the Company has recorded a $50,000 beneficial conversion discount for this note. The discount is being fully amortized over the term of the note;

(iv)                           seven notes aggregating $118,250, all due August 15, 2015 with interest ranging from 15% to 20%, with accrued interest compounding monthly at 8%, the Company is paying 667 monthly penalty shares until the note is paid in full on one $25,000 note which had been past due, all of the notes are convertible at the holder’s option at $0.25 per share. In fiscal 2012, the Company has recorded a $5,340 beneficial conversion discount for these notes. The discount is being fully amortized over the term of the notes; 

(v)                            three notes aggregating $106,250, all due August 15, 2015 with interest ranging from 20% to 25% with accrued interest compounding monthly at 8%, all of the notes are convertible at the holder’s option at $0.25 per share.  In fiscal 2012, the Company has recorded a $6,120 beneficial conversion discount for these notes. The discount is being fully amortized over the term of the notes;  

(vi)                           a $59,000, 5% convertible note due April 16, 2015. This lender has committed to lend up to $330,000 (three hundred thousand) in the form of a $165,000 note. 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 borrower is only required to repay the amount funded and the Company is not required to repay any unfunded portion of this note. The second note has been amended to include a 3% closing fee on the amount of each sum advanced plus a 5% due diligence fee on the amount of each sum advanced. The combined fees shall be added to the sum advanced for all purposes under the Note, including when calculating the amount of the interest charge. The maturity date 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 is the lesser of $1.20 or 70% of the average of the three lowest closing prices during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company (In the case that conversion shares are not deliverable by DWAC an additional 5% discount will apply; and if the shares are chilled for deposit into the DTC system and only eligible for Xclearing deposit an additional 7.5% discount shall apply).  Unless otherwise agreed in writing by both parties, at no time will the lender convert any amount of this note into common stock that would result in the lender owning more than 4.99% of the common stock outstanding. In fiscal 2014, the Company has recorded a $39,784 beneficial conversion discount for the note. The discount is being fully amortized over the initial term of the note;

(vii)                          a $13,720 outstanding balance of a  $27,500, 5% convertible note due October 21, 2014,  a $27,500, 5% convertible note due January 28, 2015 and a $27,500, 5% convertible note due April 29, 2015. This lender has committed to lend up to $165,000. 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 borrower 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 previous to the day the conversion notice is delivered to the Company. (In the case that conversion shares are not deliverable by DWAC, the principal amount of the note shall be increased by $10,000, and the conversion price shall be redefined to equal the lesser of (a) $0.60 or (b) 50% of the lowest closing price during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company).  Unless otherwise agreed in writing by both parties, at no time will the lender convert any amount of this note into common stock that would result in the lender owning more than 4.99% of the common stock outstanding. In fiscal 2014, the Company has recorded a $49,085 beneficial conversion discount for the notes. The discounts are being fully amortized over the terms of the notes; $500 outstanding balance on a $13,900, and 10% convertible note due June 1, 2014. The Conversion Price for this note is the lesser of $0.50 or 70% of the lowest closing prices during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company. (In the case that conversion shares are not deliverable by DWAC, the principal amount of the note shall be increased by $15,000, and the conversion price shall be redefined to equal the lesser of (a) $0.005 or (b) 50% of the lowest closing prices during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company). In fiscal 2014, the Company has recorded an $11,158 beneficial conversion discount for the note. The discount is being fully amortized over the term of the note; and $625 outstanding balance on a $60,000, 12% convertible note due March 20, 2015. The Conversion Price for this note is 65% of the lowest closing price during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company. (In the case that conversion shares are not deliverable by DWAC, the principal amount of the note shall be increased by $15,000, and the conversion price shall be redefined to equal the lesser of (a) $0.005 or (b) 50% of the lowest closing price during the 20 trading days immediately previous to the day the conversion notice is delivered to the Company). In fiscal 2014, the Company has recorded a $32,309 beneficial conversion discount for the note. The discount is being fully amortized over the term of the note;  

(viii)                         a $55,000 8% convertible note due February 25, 2015 and a $55,000 convertible note due April 27, 2015. Both notes are convertible at a 40% discount from the lowest closing price for the twenty trading days prior to conversion. The Company has recorded a $99,161 beneficial conversion discount for the two notes. The discount is being fully amortized over the initial term of the notes. The Company had reserved up to 918,000 shares of its common stock for conversion pursuant to the terms of the notes.  In the event the note is not paid when due, the interest rate is increased to fifteen percent until the notes are paid in full; 

(ix)                           a $42,500, 8% note due February 2, 2015, $37,500, 8% note due April 27, 2015, a$32,500, 8% note due June 3, 2015 and a $33,000, 8% note due July 14, 2015. The Company has recorded a beneficial conversion discount of $114,215 for the notes. The discount is being fully amortized over the term of the notes.   The 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”). The Company had reserved up to 2,900,000 shares of its common stock for conversion pursuant to the terms of the note.  In the event the note is not paid when due, the interest rate is increased to twenty-two percent until the note is paid in full;

(x)                             a $20,000 outstanding balance of a $40,000, 6% note due April 3, 2015. In fiscal 2014, the Company has recorded a beneficial conversion discount of $20,085 for the note. The discount is being fully amortized over the term of the note.   The note is convertible at the note holder’s option at the lesser of $1.20 or a variable conversion of 65% multiplied by the lowest VWAP in the five 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”). The Company had reserved up to 310,000 shares of its common stock for conversion pursuant to the terms of the note.  In the event the note is not paid when due, the interest rate is increased to twenty-two percent until the note is paid in full; and

(xi)                            a $44,770, 5% note due April 15, 2016. In fiscal 2014, the Company has recorded a beneficial conversion discount of $35,816 for the note. The discount is being fully amortized over the term of the note.   The note is convertible at the note holder’s option at the rate of 1.5 shares of common stock for each dollar converted.  In the event the note is not paid when due, the interest rate is increased to eighteen percent until the note is paid in full; and

(xii)                           a $50,000, 8% note due December 20, 2014. The Company has recorded a beneficial conversion discount of $36,207 for the note. The discount is being fully amortized over the term of the note.   The note is convertible at the note holder’s option at  a variable conversion of 58% multiplied by the average of three lowest trades 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”). The Company had reserved up to 340,000 shares of its common stock for conversion pursuant to the terms of the note, and a $55,000, 12% note due February 19, 2015. The Company has recorded a beneficial conversion discount of $48,015 for the note. The discount is being fully amortized over the term of the note.   The note is convertible at the note holder’s option at  a variable conversion of 58% multiplied by the average of the three lowest trades 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”). The Company had reserved up to 325,000 shares of its common stock for conversion pursuant to the terms of the note.

(b) Notes with interest only convertible at Company’s option consist of:

 (i)                            a 22% note in the amount of $10,000 due May 31, 2015;

 (ii)                           a $25,000 note due May 1, 2011, which was extended to October 31, 2013. The Company is paying the note holder 3,333 shares per month until the note is paid or renegotiated. So long as the Company pays the monthly shares this note is not in default. Interest is payable on the $10,000 note at the Company’s option and on the $25,000 note at the holder’s option in cash or in shares at the rate of $1.50 per share;

(iii)                           a $315,000, 12.462% note due April 30, 2014, but subsequently amended to such time as the law suit filed by the Company (see: PART II, ITEM 1 LEGAL PROCEEDINGS) is fully adjudicated. Interest is payable quarterly with a minimum or $600 in cash with the balance payable in cash or stock at the Company’s options calculated as the volume weighted average price of the Company’s common stock for the ten day trading period immediately preceding the last day of each three month period;

(iv)                           a $25,000 8% note due May 31, 2015, the Company issued the note holder 5,000 shares of its common stock in connection with this loan Pursuant to the terms of this note, the Company is required to issue to the note holder 5,000 shares of its common stock for each month or portion thereof that the note remains unpaid. Interest is payable on all this note at the Company’s option in cash or in shares at the rate of $0.35 per share; and a

(v)                            $15,000 5% note due May 31, 2015, the Company agreed to issue the note holder 5,000 shares of its common stock in connection with this loan.

(c) Non-convertible notes consist of:

     (i)                            a $25,000 note due May 31, 2015 which bears no interest. Pursuant to the terms of this note, the Company is required to issue to the note holder 1,000 shares of its common stock for each month or portion thereof that the note remains unpaid;

     (ii)                           a $75,000, 20% note due March 18, 2015. The note is secured by 640,197 shares of the Company’s restricted common stock. The Company issued this Noteholder 106,700 shares of restricted common stock as inducement for the loan; and

 (iii)                          two $20,000, 8% notes due January 5, 2015. The notes are secured by a $37,401 security deposit. In case of default the interest rate is increased to eighteen percent and the Company shall issue each noteholder 10,000 shares of its restricted common stock for every ten day period the notes remain unpaid.

(iv)                           a $40,000, 8% note due December 31, 2014. The Company agreed to issue 10,000 shares of restricted common stock as an inducement for the loan.

Amortization of Beneficial Conversion Feature for the six months ended October 31, 2014 and 2013 was $314,065 and $195,942, respectively and for the fiscal year ended April 30, 2014 was $417,291.

The Company's derivative financial instruments consist of embedded derivatives related to the outstanding short term Convertible Notes Payable. These embedded derivatives include certain conversion features indexed to the Company's common stock. The accounting treatment of derivative financial instruments requires that the Company record the derivatives and related items at their fair values as of the inception date of the Convertible Notes Payable and at fair value as of each subsequent balance sheet date. In addition, under the provisions of Accounting Standards Codification subtopic 815-40, Derivatives and Hedging; Contracts in Entity's Own Equity ("ASC 815-40"), as a result of entering into the Convertible Notes Payable, the Company is required to classify all other non-employee stock options and warrants as derivative liabilities and mark them to market at each reporting date. Any change in fair value inclusive of modifications of terms will be recorded as non-operating, non-cash income or expense at each reporting date. If the fair value of the derivatives is higher at the subsequent balance sheet date, the Company will record a non-operating, non-cash charge. If the fair value of the derivatives is lower at the subsequent balance sheet date, the Company will record non-operating, non-cash income.

Derivative liabilities related to notes payable increased by a net of $221,450 during the six months ended October 31, 2014 to $583,800.  $81,821 of this amount was charged to additional-paid-in-capital upon payoff or full conversion of notes payable. Derivative liabilities related to outstanding warrants decreased by a net of $66,878 during the six months ended October 31, 2014 to $171,771.

The change in fair value of the derivative liabilities of warrants outstanding at October 31, 2014 was calculated with the following average assumptions, using a Black-Scholes option pricing model are as follows:

Significant Assumptions:
Risk free interest rate	Ranging from	0.15	%	to	1.02	%
Expected stock price volatility					140	%
Expected dividend payout					0
Expected options life in years	Ranging from	.15	year	to	3.17	years

The change in fair value of the derivative liabilities of convertible notes outstanding at October 31, 2014 was calculated with the following average assumptions, using a Black-Scholes option pricing model are as follows:

Significant Assumptions:
Risk free interest rate	Ranging from	0.039	%	to	0.074	%
Expected stock price volatility					140	%
Expected dividend payout					0
Expected options life in years	Ranging from	.22	year	to	.9	year

The value of the derivative liability was re-assessed as of October 31, 2014 resulting in a gain to the consolidated statement of operations of $8,704 for the six months ended October31, 2014 and a loss to the consolidated statement of operations of $203,825 for the three months ended October 31, 2014.

	October 31, 2014
Opening balance, April 30, 2014	$	601,000
Derivative liability reclassified to additional paid in capital		(81,821	)
Derivative financial liability arising on the issue of convertible notes		465,047
Fair value adjustments		(228,655	)
Closing balance	$	755,571

XML

NOTE B - PROPERTY AND EQUIPMENT (Details) (USD $)	3 Months Ended		6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Property, Plant and Equipment [Abstract]
Depreciation, Depletion and Amortization	$ 897	$ 357	$ 1,793	$ 2,778

XML

NOTE D - NOTES PAYABLE (Details) - Fair Value, Net Derivative Liability Measured on Recurring Basis, Unobservable Input Reconciliation (USD $)	6 Months Ended
	Oct. 31, 2014
Fair Value, Net Derivative Liability Measured on Recurring Basis, Unobservable Input Reconciliation [Abstract]
Derivative Liability	$ 601,000
Derivative liability reclassified to additional paid in capital	(81,821)
Derivative financial liability arising on the issue of convertible notes	465,047
Fair value adjustments	(228,655)
Derivative Liability	$ 755,571

XML

NOTE B - PROPERTY AND EQUIPMENT (Tables) (Property and Equipment [Member])

6 Months Ended

Oct. 31, 2014

Property and Equipment [Member]

NOTE B - PROPERTY AND EQUIPMENT (Tables) [Line Items]

Property, Plant and Equipment [Table Text Block]

Major classes of property and equipment at October 31, 2014 and April 30, 2014 consist of the followings:

	October 31, 2014			April 30, 2014
Computer equipment, software and furniture	$	209,341		$	209,341
Less: accumulated depreciation		(201,160	)		(199,367	)
Net property and equipment	$	8,181		$	9,974