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 January 31, 2015

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 Avenue, 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 March 19, 2015, we had 33,891,110 shares of common stock issued and outstanding.

SPARTA COMMERCIAL SERVICES, INC.

FORM 10-Q

FOR THE QUARTER ENDED JANUARY 31, 2015

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of January 31, 2015 and April 30, 2014	3
	Condensed Consolidated Statements of Losses for the Three and Nine Months ended January 31, 2015 and 2014	4
	Condensed Consolidated Statement of Stockholders’ Equity (Deficit) for the Nine Months ended January 31, 2015	5
	Condensed Consolidated Statements of Cash Flows for the Nine Months ended January 31, 2015 and 2014	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
Signatures		30

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

SPARTA COMMERCIAL SERVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	January 31, 2015			April 30, 2014
	(unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	7,182		$	70,456
Accounts receivable		121,827			182,343
Other current assets		9,703			51,364
Total Current Assets		138,712			304,163
Property and equipment, net of accumulated depreciation and amortization of $202,057 and $199,367, respectively (NOTE B)		7,284			9,975
Goodwill		10,000			10,000
Other assets		9,628			9,628
Deposits		79,777			40,568
Total Long Term Assets		106,689			70,171
Total Assets from continuing operations		245,400			374,333
Assets from discontinued operations (NOTE C)		52,644			90,024
Total assets	$	298,045		$	464,357
LIABILITIES AND DEFICIT
Liabilities:
Current Liabilities
Accounts payable and accrued expenses	$	1,373,794		$	1,259,368
Current portion Notes payable		833,865			506,511
Total Current Liabilities		2,207,659			1,765,879
Notes payable net of beneficial conversion feature of $688,031 and $296,384, respectively (NOTE D)		1,603,368			1,513,368
Loans payable-related parties (NOTE E)		385,853			385,853
Derivative liabilities		1,217,287			601,000
Total Long Term Liabilities		3,206,508			2,500,221
Total Liabilities from continuing operations		5,414,166			4,266,100
Liabilities from discontinued operations (NOTE C)		85,302			130,420
Total liabilities		5,499,469			4,396,520
Deficit:
Preferred stock, $0.001 par value; 10,000,000 shares authorized of which 35,850 shares have been designated as Series A convertible preferred stock, with a stated value of $100 per share, 125 and 125 shares issued and outstanding, respectively		12,500			12,500
Preferred stock B, 1,000 shares have been designated as Series B redeemable preferred stock, $0.001 par value, with a liquidation and redemption value of $10,000 per share, 0 and 157 shares issued and outstanding, respectively		-			1,570
Preferred stock C, 200,000 shares have been designated as Series C redeemable, convertible preferred, $0.001 par value, with a liquidation and redemption value of $10 per share, 0 and 0 shares issued and outstanding, respectively		-			-
Common stock, $0.001 par value; 750,000,000 shares authorized, 28,640,141 and 20,987,353 shares issued and outstanding, respectively		28,640			20,987
Common stock to be issued, 751,980 and 283,777, respectively		752			284
Preferred stock B to be issued, 0 and 72.48 shares, respectively		-			72
Additional paid-in-capital		41,423,693			41,738,613
Subscriptions receivable		-			(2,118,309	)
Accumulated deficit		(47,326,498	)		(44,257,306	)
Total deficiency in stockholders' equity		(5,860,913	)		(4,601,588	)
Noncontrolling interest		659,489			669,424
Total Deficit		(5,201,424	)		(3,932,164	)
Total Liabilities and Deficit	$	298,045		$	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 NINE MONTHS ENDED JANUARY 31, 2015 AND 2014

(UNAUDITED)

	Three Months Ended						Nine Months Ended
	January 31						January 31
	2015			2014			2015			2014
Revenue
Information technology	$	164,419		$	99,023		$	435,300		$	353,187
Cost of goods sold		49,461			37,390			135,507			113,682
Gross profit		114,958			61,633			299,792			239,505
Operating expenses:
General and administrative		949,993			432,317			2,172,942			1,241,457
Depreciation and amortization		897			897			2,690			3,675
Total operating expenses		950,890			433,214			2,175,632			1,245,132
Loss from continuing operations		(835,932	)		(371,581	)		(1,875,840	)		(1,005,627	)
Other (income) expense:
Other income		(1,205	)		(21,575	)		(16,984	)		(59,770	)
Interest expense and financing cost, net		126,385			63,117			312,417			159,249
Non-cash financing costs		33,523			14,769			94,141			26,872
Amortization of debt discount		240,503			99,871			554,568			295,813
(Gain) loss in changes in fair value of derivative liability		56,287			87,638			47,583			104,483
Total other expense		455,493			243,819			991,725			526,646
Net loss from continuing operations	$	(1,291,425	)	$	(615,401	)	$	(2,867,565	)	$	(1,532,273	)
Net loss from discontinued operations		(98,017	)		(98,194	)		(210,988	)		(376,807	)
Net Loss		(1,389,442	)		(713,595	)		(3,078,553	)		(1,909,080	)
Net loss (gain) attributed to non-controlling interest		(9,316	)		21,458			9,935			43,260
Preferred dividend		(191	)		(39,764	)		(573	)		(118,861	)
Net loss attributed to common stockholders	$	(1,398,950	)	$	(731,901	)	$	(3,069,192	)	$	(1,984,681	)
Basic and diluted loss per share	$	(0.06	)	$	(0.04	)	$	(0.12	)	$	(0.10	)
Basic and diluted loss per share attributed to common stockholders	$	(0.06	)	$	(0.05	)	$	(0.13	)	$	(0.12	)
Weighted average shares outstanding		22,669,672			15,823,610			23,746,293			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 STOCKHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED JANUARY 31, 2015

UNAUDITED

	Preferred Stock				Preferred Stock													Common Stock
	Series A Preferred Stock				Series B Preferred Stock									Common Stock				to be issued
	Shares		Amount		Shares			Amount			Shares to be issued			Shares		Amount		Shares			Amount			Subscriptions Receivable			Additional Paid in Capital			Accumulated Deficit			Non-controlling 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		$	(3,932,165	)
Correcting															345				(430	)		(1	)					15									15
Redemption of preferred B stock						(157	)		(1,570	)		(72	)												2,118,309			(2,309,678	)								(193,011	)
Derivative liability reclassification																												151,127									151,127
Sale of common stock															3,917,026		3,918		351,269			351						721,623									725,892
Shares issued for financing cost															367,340		368		(24,809	)		(24	)					93,798									94,141
Shares issued for conversion of notes, interest and accounts payable															2,524,788		2,524		82,143			82						646,721									649,327
Stock compensation															811,509		812		60,000			60						304,045									304,917
Employee stock & options expense															31,780		32											77,428									77,460
Net loss																															(3,069,192	)		(9,935	)		(3,079,127	)
Balance January 31, 2015		125	$	12,500		-		$	-			-			28,640,141	$	28,640		751,950		$	753		$	-		$	41,423,691		$	(47,326,498	)	$	659,489		$	(5,201,424	)

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 NINE MONTHS ENDED JANUARY 31, 2015 AND 2014

(UNAUDITED)

	Nine Months Ended
	January 31
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(3,069,192	)	$	(1,984,681	)
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustment for reverse split		14			(72	)
Dividend on preferred stock		573			118,288
Loss allocable to non-controlling interest		(9,935	)		(43,260	)
Depreciation and amortization		2,690			3,675
Amortization of debt discount		554,568			295,813
Change in fair value of derivative liabilities		47,583			104,483
Shares issued for finance cost		94,142			51,641
Equity based compensation		382,377			206,511
(Increase) decrease in operating assets:
Accounts receivable		60,516			(132,724	)
Other assets		2,452			9,140
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses		152,659			26,640
Net cash used in operating activities		(1,781,553	)		(1,344,546	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash provided by investing activities		-			-
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from sale of common stock		725,892			938,400
Net proceeds from convertible notes		1,177,625			621,163
Net payments on notes payable		(177,500	)		(144,500	)
Net payment of other notes		-			(30,000	)
Net payment of other related parties		-			(7,407	)
Net cash provided by financing activities		1,726,017			1,377,656
Cash flows from discontinued operations:
Cash used in operating activities of discontinued operations		(7,738	)		(14,937	)
Net Cash flow from discontinued operation		(7,738	)		(14,937	)
Net (decrease) increase in cash	$	(63,274	)	$	18,173
Unrestricted cash and cash equivalents, beginning of period	$	70,456		$	38,213
Unrestricted cash and cash equivalents, end of period	$	7,182		$	56,386
Cash paid for:
Interest	$	2,405		$	16,124
Income taxes	$	944		$	5,064

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

JANUARY 31, 2015

NOTE A – SUMMARY OF ACCOUNTING POLICIES

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

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements as of January 31, 2015 and for the three and nine month periods ended January 31, 2015 and 2014 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.

Business

Sparta Commercial Services, Inc. ("Sparta" "we," "us," or the "Company") is a Nevada corporation. We are a technology company that develops and markets 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, race track, restaurants, 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 nine months ended January 31, 2015 are not necessarily indicative of the results to be expected for 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

JANUARY 31, 2015

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 the Company’s entire 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 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.

8

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2015

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 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, “Accounting for Uncertainty in Income Taxes 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 also provides guidance on derecognition, classification, treatment of interest and penalties, and disclosure of such positions.  As a result of implementing ASC 740, there has been no adjustment to the Company’s financial statements and the adoption of ASC 740 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 nine months ended January 31, 2015.

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 January 31, 2015 and April 30, 2014, the Company has no items of other comprehensive income.

9

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2015

Segment Information

The Company adopted ASC 280-10 “Disclosures about Segments of an Enterprise and Related Information” (“ASC 280-10”).  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, “Stock Compensation”, (“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 three months ended January 31, 2015 and 2014, the Company incurred zero and $26,650 in advertising costs, respectively. During the nine months ended January 31, 2015 and 2014, the Company incurred $3,919 and $41,000 in advertising costs, respectively.

10

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2015

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 $0.06 and $0.05 for the three months ended January 31, 2015 and 2014, respectively, and $0.13 and $0.12 for the nine months ended January 31, 2015 and 2014, respectively.  At January 31, 2015 and 2014, 1,925,853 and 5,759,888 common equivalent 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 of $3,069,192 and $1,984,681 during the nine months ended January 31, 2015, and 2014, respectively and $3,265,648 for the year end April 30, 2014.  The Company had a negative net worth of $5,201,424 at January 31, 2015.

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.

NOTE B – PROPERTY AND EQUIPMENT

Major classes of property and equipment at January 31, 2015 and April 30, 2014 consist of the followings:

	January 31, 2015			April 30, 2014
Computer equipment, software and furniture	$	209,341		$	209,342
Less: accumulated depreciation		(202,057	)		(199,367	)
Net property and equipment	$	7,284		$	9,975

Depreciation expense of continuing operations for property and equipment was $2,690 and $3,675, respectively for the nine months ended January 31, 2015 and 2014 and $897 and $897, respectively for the three months ended January 31, 2015 and 2014.

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. 

11

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2015

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.

	Nine Months Ended
	January 31,			January 31,
	2015			2014
Revenues	$	32,394		$	78,447
Net (loss)	$	(210,988	)	$	(376,807	)

As the Company sold its entire 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 nine months ended January 31, 3015 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 January 31, 2015 and April 30, 2014:

	January 31,			April 30,
	2015			2014
Motorcycles and other vehicles	$	33,518		$	60,686
Less: accumulated depreciation		(9,145	)		(5,017	)
Motorcycles and other vehicles, net of accumulated depreciation		24,373			55,669
Less: estimated reserve for residual values		(2,437	)		(4,252	)
Motorcycles and other vehicles under operating leases, net	$	21,936		$	51,417

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 nine months ended January 31, 2015 was $15,565 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 January 31, 2015 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 2012.  As of January 31, 2015 and April 30, 2014, the Company had: RISC loans net of loss reserves of $17,372 and $19,221, respectively, and deficiency receivables of $3,132 and $0, respectively. At January 31, 2015 and at April 30, 2014, the reserve for doubtful RISC loan receivables was $1,644 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 three or nine months ending January 31, 2015 or the year ending April 30, 2014.

12

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2015

LIABILITIES INCLUDED IN DISCONTINUED OPERATIONS

SECURED NOTES PAYABLE

	January 31,		April 30,
	2015		2014
Secured, subordinated  individual lender (a)	$	72,018	$	117,508
Secured, subordinated individual lender (b)		12,080		12,912
Total	$	85,302	$	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 January 31, 2015 is 15.29%.

(b)   On October 31, 2008, the Company purchased certain loans secured by a portfolio of secured motorcycle leases (“Purchased Portfolio”) for a total purchase price of $100,000.  The Company paid $80,000 at closing, $10,000 in April 2009 and agreed to pay the remaining $10,000 upon receipt of additional Purchase Portfolio documentation. As of 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, 2011, the holder converted $50,000 of the outstanding balance of the Senior Secured Note into 60,606 shares of the Company’s restricted common stock. The Senior Secured Note, which had an outstanding balance of $12,080 at January 31, 2015, has been extended to May 1, 2015.

At January 31, 2015, the notes payable mature as follows:

Year ended January 31,	Amount
2016	$	85,302
Total Due	$	85,302

NOTE D – NOTES PAYABLE

Notes Payable	January 31, 2015			April 30, 2014
Notes convertible at holder’s option (a)	$	2,600,263		$	1,901,263
Notes with interest only convertible at Company’s option (b)		285,000			390,000
Non-convertible notes payable (c)		240,000			25,000
Subtotal		3,125,263			2,316,263
Less, Debt discount		(688,031	)		(296,384	)
Total	$	2,437,232		$	2,019,879

13

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2015

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

     (i)                            a $1,293,368, 8% note originally 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, convertible at the holder’s option at $0.495 per share. The Company had recorded a $663,403 beneficial conversion discount for this note which was fully amortized during fiscal 2014; 

 (ii)                           (a) a $56,500, 6% note due June 30, 2015, and (b) a $40,000 note due December 23, 2015 The Company has recorded beneficial conversion discounts totaling $85,465 for the notes. The discounts are 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 4,753,694 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 eighteen percent until the note is paid in full;

 (iii)                          (a) a $25,000, 12% convertible note due May 27, 2014 (the “Debenture”). The Debenture 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 Paragraph 12 of the Debenture, 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 (b) 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%. On one $25,000 note which had been past due, the Company is paying 667 monthly penalty shares until the note is paid in full. 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 December 16, 2015. This is the final tranche of a $165,000 note. 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. The Company has recorded a $29,333 beneficial conversion discount for the note. The discount is being fully amortized over the initial term of the note;

14

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2015

 (vii)                         (a) a $27,500, 5% convertible note due January 28, 2015, (b) a $27,500, 5% convertible note due April 29, 2015 and (c) a $27,500 convertible note due January 28, 2016. 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 Company is only required to repay the amount funded and the Company is not required to repay any unfunded portion of this note.  The maturity date of each note is one year from the effective date of each payment and is the date upon which the principal sum of this note, as well as any unpaid interest and other fees, shall be due and payable.  The conversion price for the notes is the lesser of $0.60 or 70% of the lowest closing price during the 20 trading days immediately 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 $59,437 beneficial conversion discount for the notes. The discounts are being fully amortized over the terms of the notes; (d) $500 outstanding balance on a $13,900, 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.

 (viii)                        three, $55,000 8% convertible notes due February 25, 2015, April 27, 2015, and January 26, 2016. The 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 $128,494 beneficial conversion discount for the notes. The discount is being fully amortized over the initial term of the notes. The Company had reserved up to 5,951,586 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 fifteen percent until the notes are paid in full;  

 (ix)                           (a) a $32,500, 8% note due June 3, 2015; (b) a $33,000, 8% note due July 14, 2015; (c) a $33,000, 8% note due August 16, 2015 ; and (d) a $33,000, 8% note due October 5, 2015. The Company has recorded a beneficial conversion discount of $86,721 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 has reserved up to 3,500,000 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;

 (x)                            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

 (xi)                           (a) 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”); (b) 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”) ;(c) $52,500 outstanding under a 12% note due December 22, 2015. The Company has recorded a beneficial conversion discount of $67,806 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 twenty 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”); and (d) a $55,000, 12% note due June 22, 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 twenty 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 3,673,750 shares of its common stock for conversion pursuant to the terms of the notes.

15

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2015

 (xii)                          (a) $55,000 outstanding under a $220,000, 10% note due May 24, 2015 and (b) $55,000 outstanding under the same note due July 27, 2015. The Company has recorded a beneficial conversion discount of $105,364 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 of 58% multiplied by the lowest trading price 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 7,000,000 shares of its common stock for conversion pursuant to the terms of the notes. 

 (xiii)                         a $55,125, 8% convertible note due December 9, 2015. The Company has recorded a beneficial conversion discount of $55,000 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 60% multiplied by the average of the three lowest 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”). The Company had reserved up to 1,654,000 shares of its common stock for conversion pursuant to the terms of the note. 

 (xiv)                        a $50,000, 10% convertible note due December 15, 2015.  The Company has recorded a beneficial conversion discount of $39,400 for the note. The discount is being fully amortized over the term of the notes.   The note is convertible at the note holder’s option at a variable conversion prices such that during the period during which the note is outstanding at 58% multiplied by the average of the three lowest closing bid prices 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”).

(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 $210,000, 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;

 (iii)                          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  and pay the holder 1,000 shares per month for each month or fraction thereof the note remains unpaid; and

 (iv)                          a $100,000, 8% note due July 31, 2016. This note is collateralized by a security deposit in the amount of $76,610 held by the Company’s landlord.

Amortization of Beneficial Conversion Feature for the nine months ended January 31, 2015 and 2014 was $554,568 and $295,813, respectively and for the fiscal year ended April 30, 2014 was $417,291.

16

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2015

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 $671,391 during the nine months ended January 31, 2015 to $1,033,742.  $151,127 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 $55,104 to $183,544 during the nine months ended January 31, 2015.

The change in fair value of the derivative liabilities of warrants outstanding at January 31, 2015 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	0.143% to 0.695		%
Expected stock price volatility			168	%
Expected dividend payout			0
Expected options life in years	Ranging from	.83 year to 2.73		years

The change in fair value of the derivative liabilities of convertible notes outstanding at January 31, 2015 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	0.01% to 0.145		%
Expected stock price volatility			168	%
Expected dividend payout			0
Expected options life in years	Ranging from	.0 year to1		year

The value of the derivative liability was re-assessed as of January 31, 2015 resulting in a loss to the consolidated statement of operations of $47,583 for the nine months ended January 31, 2015 and a loss to the consolidated statement of operations of $56,287 for the three months ended January 31, 2015.

Note Derivative Liability and Warrant Derivative Liability:	January 31, 2015
Opening balance, April 30, 2014	$	601,000
Derivative liability reclassified to additional paid in capital		(151,127	)
Derivative financial liability arising on the issue of convertible notes		1, 321,982
Fair value adjustments		(554,568	)
Closing balance	$	1,217,287

NOTE E – LOANS PAYABLE TO RELATED PARTIES

As of January 31, 2015 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, 2012, 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.

17

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2015

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 stated value per share, and 200,000 shares have been designated as Series C Preferred Stock with a $10 per share liquidation value, and 750,000,000 shares of common stock with $0.001 par value per share.  The Company had 125 and 125 shares of Series A preferred stock issued and outstanding as of January 31, 2015 and April 30, 2014, respectively.  The Company had no and 157 shares of Series B preferred stock issued and outstanding as of January 31, 2015 and April 30, 2014, respectively.  The Company had no shares of Series C preferred stock issued and outstanding as of January 31, 2015 and April 30, 2014, respectively. The Company has 28,640,141 and 20,987,353 shares of common stock issued and outstanding as of January 31, 2015 and April 30, 2014, respectively.

Preferred Stock Series A

During the nine months ended January 31, 2015, there were no transactions in Series A Preferred, however, at January 31, 2015, there were $7,389 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 nine months ended January 31, 2015, pursuant to the terms of the Series B Preferred Stock, the Company redeemed and returned to treasury all shares of Series B Preferred Stock and all shares of to be issued Series B Preferred Stock by exchanging the shares for $2,118,309 of note subscription receivables and $204,458 of interest receivable thereon. Subsequent to this redemption there were no shares of Series B Preferred Stock outstanding and there were no shares of Series B Preferred Stock payable.

Preferred Stock Series C

No shares of Preferred Stock Series C were issued during the nine months ended January 31, 2015.

Common Stock

During the nine months ended January 31, 2015 and the nine months ended January 31, 2014, the Company expensed  $382,377 and $206,511, respectively, for non-cash charges related to stock and option compensation expense.

During the nine months ended January 31, 2015, the Company:

●  sold 4,268,295 shares of common stock to eighteen accredited investors for $725,892, of which 351,269 shares remained to be issued at January 31, 2015,

●  issued 2,468,771 shares of common stock upon the conversion of convertible notes and accrued interest in the amount of $602,263, of which 122,451 shares were classified as to be issued at April 30, 2014 and 82,143 shares remained to be issued at January 31, 2015,

●  issued 367,340 shares of common stock valued at $94,141 pursuant to terms of various notes of which no shares remained to be issued at January 31, 2015, and 24,809 shares were classified as to be issued at April 30, 2014,

● issued 811,509 shares of common stock valued at $304,917 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 $77,460 to three employees in exchange for their outstanding stock purchase options.

NOTE G – NONCONTROLLING INTEREST

For the nine months ended January 31, 2015, the non-controlling interest is summarized as follows:

	Amount
Balance at April 30, 2014	$	669,424
Non-controlling interest’s share of losses		(9,935	)
Balance at January 31, 2015	$	659,489

18

SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2015

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 our financial liabilities as of January 31, 2015:

	Fair Value at		Fair Value Measurement Using
	January 31,
	2015		Level 1		Level 2		Level 3
Derivative liability	$	1,217,287	$	-	$	-	$	1,217,287

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 nine months ended January 31, 2015 were:

			Increased		Decrease
	April 30,		During		in Fair		January 31,
	2014		Period		Value		2015
Derivative liability	$	601,000	$	1,249,787	$	633,499	$	1,217,287
Total	$	601,000	$	1,249,787	$	633,499	$	1,217,287

NOTE I – NON-CASH FINANCIAL INFORMATION

During the nine months ended January 31, 2015, the Company:  

●  issued 2,468,771 shares of common stock upon the conversion of convertible notes and accrued interest in the amount of $602,263, of which 122,451 shares were classified as to be issued at April 30, 2014 and 82,143 shares remained to be issued at January 31, 2015.

●  issued 367,340 shares of common stock valued at $94,141 pursuant to terms of various notes of which no shares remained to be issued at January 31, 2015.

● 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.

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SPARTA COMMERCIAL SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2015

NOTE J – SUBSEQUENT EVENTS

In February and through March 5, 2015, the Company:

Issued 2,114,322 shares of common stock upon the conversion of $94,330 of notes and accrued interest thereon.

Sold 1,296,830 shares of common stock to four accredited investors for $77,781, of which 367,462 shares remain to be issued.

Issued, pursuant to the terms of notes, 185,952 shares, with another 272,331 shares be issued, all valued at $40,592.

Issued 100,000 shares of common stock valued at $12,000 as payment for accounts payable.

Issued 428,613 shares listed as to be issued at January 31, 2015.

Borrowed pursuant to a $27,500, 5% note due February 25, 2017.  The note is convertible at the note holder’s option at  a variable conversion of 70% multiplied by the average of the three lowest closing prices in the twenty 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 $137,500 under the same terms 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 November 24, 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 pursuant to a $25,000, 10% note due February 2, 2016. Interest on the note is convertible at the Company’s option at $0.15.

Borrowed pursuant to a $50,000, 20% note due August 26, 2015.

Borrowed $55,000 pursuant to two $27,500, 5% notes both due February 25, 2017.  The notes are convertible at the note holder’s option at  a variable conversion of 60% multiplied by the lowest closing prices 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.

Reserved, pursuant to the terms of these notes, 8,387,569 shares for potential conversion of the notes.

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 January 1, 2001 (date of inception) through January 31, 2015, the Company incurred loss of $47,326,498.  Of these losses, $3,069,192 was incurred in the nine months ending January 31, 2015 and $1,984,681 in the nine months ending January 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 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.

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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 January 31, 2015 to the Three Months Ended January 31, 2014

For the three months ended January 31, 2015 and 2014, 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 the Company’s entire 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
	January 31,			January 31,
	2015			2014
Revenues	$	9,290		$	19,450
Net (loss)	$	(98,017	)	$	(98,194	)

RESULTS OF CONTINUING OPERATIONS

Revenues

Revenues totaled $164,419 during the three months ended January 31, 2015 as compared to $99,023 during the three months ended January 31, 2014. This $65,396 or 66.04% increase in revenues was due to a $72,037 or121% increase in revenues from mobile app sales and service, off-set by a $6,641or 16.8% decline in sales of history reports.

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Costs and Expenses

General and administrative expenses were $949,993 during the three months ended January 31, 2015, compared to $432,317 during the three months ended January 31, 2014, up $517,676 (119.7%) as management continued shifting its focus from discontinued operations to continuing operations.  Expenses incurred during the current three month period consisted primarily of the following expenses: compensation and related costs, $467,890; accounting, audit and professional fees, $86,548; consulting fees, $107,150; rent, utilities and telecommunications expenses $38,813; travel and entertainment, $649; stock based compensation, $194,952; and advertising and marketing, $2,841.  Expenses incurred during the comparative three month period in 2014 consisted primarily of the following expenses: compensation and related costs, $182,870; accounting, audit and professional fees, $34,585; consulting fees, $75,223; rent, utilities and telecommunications expenses $38,044; travel and entertainment, $9,097; stock based compensation, $55,337; and advertising and marketing, $19,454.

Net Loss

We incurred a net loss before preferred dividends and net loss attributed to non-controlling interest of $1,389,442 for our three months ended January 31, 2015 as compared to $713,595 for the corresponding interim period in 2014, representing a $675,847 or 94.7% increase in net loss.  The increase in our net loss before preferred dividends and net loss attributed to non-controlling interest for our three month interim period ended January 31, 2015 was attributable primarily to the $517,676 or 119.7% increase in operating expenses, a $20,370 or 94.4% decrease in other income, a $18,754 or 127% increase in non-cash financing costs, a $63,268 or 100.2% increase in interest and financing costs, and a $140,632 or 140.8% increase in the amortization of debt discount,  all partially off-set by a $31,351 or 35.8% decrease in the change in fair value of derivative liabilities.

We also incurred non-cash preferred dividend expense of $191 for our three month period ended January 31, 2015 as compared to $39,764 for the quarter January 31, 2014.  This decrease was the result of the redemption and retirement of the Series B Preferred Stock. The $667,049 or 91.1% increase in net loss attributable to common stockholders for our three month period ended January 31, 2015 was due to the factors described above, and the $30,774 or 143.4% decrease in net loss attributed to the non-controlling interest.

Comparison of the Nine Months Ended January 31, 2015 to the Nine Months Ended January 31, 2014

For the nine months ended January 31, 2015 and 2014, 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 the Company’s entire 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.

	Nine Months Ended
	January 31,			January 31,
	2015			2014
Revenues	$	32,394		$	78,447
Net (loss)	$	(210,988	)	$	(376,807	)

For the nine months ended January 31, 2015 and 2014, we have generated limited sales revenues, have incurred significant expenses, and have sustained significant losses.

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RESULTS OF CONTINUING OPERATIONS

Revenues

Revenues totaled $435,300 during the nine months ended January 31, 2015 as compared to $353,187 during the nine months ended January 31, 2014.   This $82,112 or 23.3% increase in revenues was due primarily to a $110,954 or 60.4% increase in revenues from mobile app sales and service, off-set by a $28,842 or 17.0% decline in sales of history reports.

Costs and Expenses

General and administrative expenses were $2,172,942 during the nine months ended January 31, 2015, compared to $1,241,457 during the nine months ended January 31, 2014, an increase of $931,485 or 75.0%.  Expenses incurred during the current nine month period consisted primarily of the following expenses: compensation and related costs, $1,039,042; accounting, audit and professional fees, $194,529; consulting fees, $214,923; rent, utilities and telecommunication expenses $152,692; travel and entertainment, $11,939;  non-cash stock based compensation, $382,377 and advertising and marketing expenses of $22,568.  Expenses incurred during the comparative nine month period in 2014 consisted primarily of the following expenses: compensation and related costs, $520,171; accounting, audit and professional fees, $88,143; consulting fees, $141,526; rent, utilities and telecommunication expenses $109,248; travel and entertainment, $17,380;  non-cash stock based compensation, $206,511, and advertising and marketing expenses of $57,107.  

For the nine months ended January 31, 2015, we incurred: interest expenses and financing costs of $312,417, a non-cash charge of $94,141 related to shares of common stock and warrants issued for financing cost, a charge of $554,568 for beneficial conversion discounts, and a non-cash charge of $47,583 for change in the fair value of derivative liabilities. For the nine months ended January 31, 2014, we incurred: interest expenses and financing costs of $159,249, a non-cash charge of $26,872 related to shares of common stock and warrants issued for financing cost, a charge of $295,813 for beneficial conversion discounts, and a non-cash gain of $104,483 for change in derivative liabilities.

Net Loss

We incurred a net loss before preferred dividends and loss attributed to non-controlling interest of $3,078,554 for the nine months ended January 31, 2015 as compared to $1,909,080 for the corresponding interim period in 2014.  The $1,169,474 or 61.3% increase in the net loss before preferred dividends and loss attributed to non-controlling interest for the nine month interim period ended January 31, 2015 was attributable to: a $930,500 or 74.7% increase in operating expenses; a $67,269 or 250.3% increase in non-cash financing costs; a $153,168 or 96.2% increase in interest expense; a $258,755 or 87.5% increase in amortization of debt discount; and a $42,786 or 71.6% decrease in other income. The net loss was partially off-set by the $82,113 or 23.2%, increase in revenue; and the $56,900 or 54.5% decrease in the loss due to change of fair value of derivative liabilities

We also incurred non-cash preferred dividend expense of $573 and $118,861, respectively for our nine month periods ended January 31, 2015 and 2014. This decrease was the result of the redemption and retirement of the Series B Preferred Stock

Our net loss attributable to common stockholders increased to $3,069,192 for the nine month period ended January 31, 2015 as compared to $1,984,681 for the corresponding period in 2014.  The $1,084,511 or 54.6% increase in net loss attributable to common stockholders for our nine month period ended January 31, 2015 was due to the factors described above and a $33,325 or 77.0% decrease in the net loss attributed to non-controlling interest.

LIQUIDITY AND CAPITAL RESOURCES

As of January 31, 2015, we had a deficit net worth of $5,201,424. We generated a deficit in cash flow from operations of $1,781,553 the nine months ended January 31, 2015. This deficit is primarily attributable to our net loss from operations of $3,069,192 which was partially reduced by: the $47,583 for the change in the fair value of derivative liabilities, $554,568 amortization of debt discount, depreciation of $2,690, the value of shares issued for compensation of $382,377, shares issued for finance costs of $94,142, preferred dividends of $573, a $60,516 decrease in accounts receivable, a decrease in  other assets of $2,452,  and the $152,659 increase in accounts payable, all off-set by the $9,935 loss allocable to non-controlling interest.

We met our cash requirements during the nine month period as follows: through net proceeds of notes and convertible notes payable of $1,177,625; net proceeds from the sale of common equity in the amount of $725,892.  We made net payments on notes payable in the amount of $177,500.

Net cash used by discontinued operations was $7,738.

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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 January 31, 2015, we had 15 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. 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.

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 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 are negotiating the potential sale of securities with investment banking companies to assist us in 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.

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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 in the information technology sector, 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.

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. Additionally, if we fail to remain current on our reporting requirements or if our common stock is removed from trading on any recognized domestic market, the majority of our debt securities would be placed in default.

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.

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Revenue Recognition

Revenues from history report and mobile app 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.

Stock-Based Compensation

The Company adopted 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.

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RECENT ACCOUNTING PRONOUNCEMENT

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.

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; and

● 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, or as of the last day thereof, 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. 

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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 14, 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 January 31, 2015, The Company:

· Sold 2,446,892 shares of common stock to thirteen accredited investors for $263,532 of which 503,140 shares are to be issued.

· Issued to 1,365,361 shares of common stock to six investors upon conversion of $189,876 of convertible notes and accrued interest with an additional 224,558 shares to be issued.

· Issued 150,696 shares valued at $33,523 to four investors pursuant to the terms of their agreements with an additional 66,850 shares to be issued.

· Issued 571,400 shares valued at $160,039 to two consultants.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.  OTHER INFORMATION

Not applicable.

28

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.
10.1	2014 Equity Incentive Plan(1)
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 (1) Incorporated by reference to the Registrant’s Registration Statement on Form S-8 filed with the Securities and Exchange Commission on November 11, 2014.

29

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:  March 23, 2015	By:  /s/ Anthony L. Havens
	Anthony L. Havens
	Chief Executive Officer
Date:  March 23, 2015	By:  /s/ Anthony W. Adler
	Anthony W. Adler
	Principal Financial Officer

30

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 January 31, 2015 of Sparta Commercial Services, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  March 23, 2015

/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 January 31, 2015 of Sparta Commercial Services, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  March 23, 2015

/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 January 31, 2015, 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:  March 23, 2015

/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 January 31, 2015, 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:  March 23, 2015

/s/ Anthony W. Adler

Anthony W. Adler

Principal Financial Officer

XML

NOTE E - LOANS PAYABLE TO RELATED PARTIES (Details) (USD $)	Jan. 31, 2015	Apr. 30, 2014
NOTE E - LOANS PAYABLE TO RELATED PARTIES (Details) [Line Items]
Notes Payable, Related Parties	$ 385,853	$ 385,853
Officer and Director [Member]
NOTE E - LOANS PAYABLE TO RELATED PARTIES (Details) [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	0.00%	0.00%

XML

NOTE K - GOING CONCERN MATTERS (Details) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended	163 Months Ended
	Jan. 31, 2015	Jan. 31, 2014	Jan. 31, 2015	Jan. 31, 2014	Apr. 30, 2014	Jan. 31, 2015
Going Concern Disclosure [Abstract]
Net Income (Loss) Attributable to Parent	$ (1,398,950)	$ (731,901)	$ (3,069,192)	$ (1,984,681)	$ (3,265,648)	$ (47,326,498)

XML

NOTE C - DISCONTINUED OPERATIONS (Details) - Schedule of Maturities of Long-term Debt (USD $)	Jan. 31, 2015	Apr. 30, 2014
NOTE C - DISCONTINUED OPERATIONS (Details) - Schedule of Maturities of Long-term Debt [Line Items]
Total Due	$ 2,437,232	$ 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]
2016	85,302
Total Due	$ 85,302

XML

NOTE A - SUMMARY OF ACCOUNTING POLICIES (Details) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended	163 Months Ended
	Jan. 31, 2015	Jan. 31, 2014	Jan. 31, 2015	Jan. 31, 2014	Apr. 30, 2014	Jan. 31, 2015
Accounting Policies [Abstract]
Advertising Expense	$ 0	$ 26,650	$ 3,919	$ 41,000
Earnings Per Share, Basic and Diluted (in Dollars per share)	$ (0.06)	$ (0.05)	$ (0.13)	$ (0.12)
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares)			1,925,853	5,759,888
Net Income (Loss) Attributable to Parent	(1,398,950)	(731,901)	(3,069,192)	(1,984,681)	(3,265,648)	(47,326,498)
Working Capital (Deficit)	$ 5,201,424		$ 5,201,424			$ 5,201,424

XML

NOTE H - FAIR VALUE MEASUREMENTS (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (USD $)	Jan. 31, 2015	Apr. 30, 2014
NOTE H - FAIR VALUE MEASUREMENTS (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivative liability	$ 1,217,287	$ 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 liability	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 liability	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 liability	$ 1,217,287

XML

NOTE D - NOTES PAYABLE (Details) - Schedule of Fair Value of Convertible Notes (Debt [Member])	9 Months Ended
	Jan. 31, 2015
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Expected stock price volatility	168.00%
Expected dividend payout	0.00%
Minimum [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Risk free interest rate	0.01%
Expected options life in years	0 years
Maximum [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Risk free interest rate	0.145%
Expected options life in years	1 year

XML

NOTE C - DISCONTINUED OPERATIONS

9 Months Ended

Jan. 31, 2015

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.

	Nine Months Ended
	January 31,			January 31,
	2015			2014
Revenues	$	32,394		$	78,447
Net (loss)	$	(210,988	)	$	(376,807	)

As the Company sold its entire 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 nine months ended January 31, 3015 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 January 31, 2015 and April 30, 2014:

	January 31,			April 30,
	2015			2014
Motorcycles and other vehicles	$	33,518		$	60,686
Less: accumulated depreciation		(9,145	)		(5,017	)
Motorcycles and other vehicles, net of accumulated depreciation		24,373			55,669
Less: estimated reserve for residual values		(2,437	)		(4,252	)
Motorcycles and other vehicles under operating leases, net	$	21,936		$	51,417

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 nine months ended January 31, 2015 was $15,565 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 January 31, 2015 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 2012.  As of January 31, 2015 and April 30, 2014, the Company had: RISC loans net of loss reserves of $17,372 and $19,221, respectively, and deficiency receivables of $3,132 and $0, respectively. At January 31, 2015 and at April 30, 2014, the reserve for doubtful RISC loan receivables was $1,644 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 three or nine months ending January 31, 2015 or the year ending April 30, 2014.

LIABILITIES INCLUDED IN DISCONTINUED OPERATIONS

SECURED NOTES PAYABLE

	January 31,		April 30,
	2015		2014
Secured, subordinated  individual lender (a)	$	72,018	$	117,508
Secured, subordinated individual lender (b)		12,080		12,912
Total	$	85,302	$	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 January 31, 2015 is 15.29%.

(b)   On October 31, 2008, the Company purchased certain loans secured by a portfolio of secured motorcycle leases (“Purchased Portfolio”) for a total purchase price of $100,000.  The Company paid $80,000 at closing, $10,000 in April 2009 and agreed to pay the remaining $10,000 upon receipt of additional Purchase Portfolio documentation. As of 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, 2011, the holder converted $50,000 of the outstanding balance of the Senior Secured Note into 60,606 shares of the Company’s restricted common stock. The Senior Secured Note, which had an outstanding balance of $12,080 at January 31, 2015, has been extended to May 1, 2015.

At January 31, 2015, the notes payable mature as follows:

Year ended January 31,	Amount
2016	$	85,302
Total Due	$	85,302

XML

NOTE H - FAIR VALUE MEASUREMENTS (Details) - Fair Value, Liabilities Measured on Recurring Basis (USD $)	9 Months Ended
	Jan. 31, 2015
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	1,249,787
Decrease in Fair Value	633,499
Derivative Liability, Fair Value, End of Period	1,217,287
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	1,249,787
Decrease in Fair Value	633,499
Derivative Liability, Fair Value, End of Period	$ 1,217,287

XML

NOTE C - DISCONTINUED OPERATIONS (Details) (Consumer Lease and Loan Lines of Business [Member], USD $)	9 Months Ended	12 Months Ended	0 Months Ended		1 Months Ended	12 Months Ended
	Jan. 31, 2015	Apr. 30, 2014	Jan. 31, 2011	Oct. 31, 2008	Apr. 30, 2009	Apr. 30, 2009
Vehicles [Member]
NOTE C - DISCONTINUED OPERATIONS (Details) [Line Items]
Depreciation and Amortization, Discontinued Operations	$ 15,565	$ 29,411
Consumer Other Financing Receivable [Member]
NOTE C - DISCONTINUED OPERATIONS (Details) [Line Items]
Disposal Group, Including Discontinued Operation, Accounts, Notes and Loans Receivable, Net	17,372	19,221
Financing Receivable, Recorded Investment, Past Due	3,132	0
Financing Receivable, Allowance for Credit Losses	1,644	1,124
Secured Debt [Member] | Minimum [Member]
NOTE C - DISCONTINUED OPERATIONS (Details) [Line Items]
Debt Instrument, Term	1 year
Secured Debt [Member] | Maximum [Member]
NOTE C - DISCONTINUED OPERATIONS (Details) [Line Items]
Debt Instrument, Term	5 years
Secured Debt [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 $)	Jan. 31, 2015	Apr. 30, 2014
Schedule of Property and Equipment [Abstract]
Computer equipment, software and furniture	$ 209,341	$ 209,342
Less: accumulated depreciation	(202,057)	(199,367)
Net property and equipment	$ 7,284	$ 9,975

XML

NOTE I - NON-CASH FINANCIAL INFORMATION (Details) (USD $)	9 Months Ended
	Jan. 31, 2015	Apr. 30, 2014
Conversion of Convertible Notes and Accrued Interest [Member]
NOTE I - NON-CASH FINANCIAL INFORMATION (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued	2,468,771
Debt Conversion, Original Debt, Amount (in Dollars)	$ 602,263
Common stock to be issued, shares	82,143	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	367,340
Debt Conversion, Original Debt, Amount (in Dollars)	94,141
Common stock to be issued, shares		24,809
Stock Issued for Accounts Payable [Member]
NOTE I - NON-CASH FINANCIAL INFORMATION (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued	138,160
Debt Conversion, Original Debt, Amount (in Dollars)	$ 47,064
Common stock to be issued, shares		20,000

XML

NOTE C - DISCONTINUED OPERATIONS (Details) - Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures (USD $)	3 Months Ended		9 Months Ended
	Jan. 31, 2015	Jan. 31, 2014	Jan. 31, 2015	Jan. 31, 2014
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Abstract]
Revenues			$ 32,394	$ 78,447
Net (loss)	$ (98,017)	$ (98,194)	$ (210,988)	$ (376,807)

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 $)	Jan. 31, 2015	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	(9,145)	(5,017)
Motorcycles and other vehicles, net of accumulated depreciation	24,373	55,669
Less: estimated reserve for residual values	(2,437)	(4,252)
Motorcycles and other vehicles under operating leases, net	$ 21,936	$ 51,417

XML

NOTE B - PROPERTY AND EQUIPMENT

9 Months Ended

Jan. 31, 2015

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

NOTE B – PROPERTY AND EQUIPMENT

Major classes of property and equipment at January 31, 2015 and April 30, 2014 consist of the followings:

	January 31, 2015			April 30, 2014
Computer equipment, software and furniture	$	209,341		$	209,342
Less: accumulated depreciation		(202,057	)		(199,367	)
Net property and equipment	$	7,284		$	9,975

Depreciation expense of continuing operations for property and equipment was $2,690 and $3,675, respectively for the nine months ended January 31, 2015 and 2014 and $897 and $897, respectively for the three months ended January 31, 2015 and 2014.

XML

NOTE C - DISCONTINUED OPERATIONS (Details) - Schedule of Short-term Debt (USD $)	Jan. 31, 2015		Apr. 30, 2014
Short-term Debt [Line Items]
Senior subordinated notes	$ 85,302		$ 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	72,018	[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	$ 85,302		$ 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 January 31, 2015 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, 2011, the holder converted $50,000 of the outstanding balance of the Senior Secured Note into 60,606 shares of the Company's restricted common stock. The Senior Secured Note, which had an outstanding balance of $12,080 at January 31, 2015, has been extended to May 1, 2015.

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NOTE F - EQUITY TRANSACTIONS (Details) (USD $)	0 Months Ended	9 Months Ended
	May 18, 2013	Jan. 31, 2015	Jan. 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		750,000,000		750,000,000
Common Stock, Par or Stated Value Per Share (in Dollars per share)		$ 0.001		$ 0.001
Common Stock, Shares, Issued		28,640,141		20,987,353
Common Stock, Shares, Outstanding		28,640,141		20,987,353
Share-based Compensation (in Dollars)		$ 382,377	$ 206,511
Stock Issued During Period, Value, New Issues (in Dollars)		725,892
Employee [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)		77,460
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)		7,389		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] | Redemption of Preferred Shares for Note Subscription Receivable [Member]
NOTE F - EQUITY TRANSACTIONS (Details) [Line Items]
Stock Redeemed or Called During Period, Shares		2,118,309
Common stock to be issued, shares		204,458
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		0		157
Preferred Stock, Shares Outstanding		0		157
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		82,143		122,451
Debt Conversion, Converted Instrument, Shares Issued		2,468,771
Debt Conversion, Original Debt, Amount (in Dollars)		602,263
Stock Issued to Note Holder Pursuant to Terms of Note [Member]
NOTE F - EQUITY TRANSACTIONS (Details) [Line Items]
Common stock to be issued, shares				24,809
Debt Conversion, Converted Instrument, Shares Issued		367,340
Debt Conversion, Original Debt, Amount (in Dollars)		94,141
Stock Issued for Accounts Payable [Member]
NOTE F - EQUITY TRANSACTIONS (Details) [Line Items]
Common stock to be issued, shares				20,000
Debt Conversion, Converted Instrument, Shares Issued		138,160
Debt Conversion, Original Debt, Amount (in Dollars)		47,064
Stock Issued for Cash [Member]
NOTE F - EQUITY TRANSACTIONS (Details) [Line Items]
Stock Issued During Period, Shares, New Issues		4,268,295
Number of Accredited Investors		18
Stock Issued During Period, Value, New Issues (in Dollars)		725,892
Stock to be Issued		351,269
Stock Issued to Consultants [Member]
NOTE F - EQUITY TRANSACTIONS (Details) [Line Items]
Stock Issued During Period, Shares, Issued for Services		811,509
Stock Issued During Period, Value, Issued for Services (in Dollars)		$ 304,917

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Jan. 31, 2015	Apr. 30, 2014
Current Assets
Cash and cash equivalents	$ 7,182	$ 70,456
Accounts receivable	121,827	182,343
Other current assets	9,703	51,364
Total Current Assets	138,712	304,163
Property and equipment, net of accumulated depreciation and amortization of $202,057 and $199,367, respectively (NOTE B)	7,284	9,975
Goodwill	10,000	10,000
Other assets	9,628	9,628
Deposits	79,777	40,568
Total Long Term Assets	106,689	70,171
Total Assets from continuing operations	245,400	374,333
Assets from discontinued operations (NOTE C)	52,644	90,024
Total assets	298,045	464,357
Current Liabilities
Accounts payable and accrued expenses	1,373,794	1,259,368
Current portion Notes payable	833,865	506,511
Total Current Liabilities	2,207,659	1,765,879
Notes payable net of beneficial conversion feature of $688,031 and $296,384, respectively (NOTE D)	1,603,368	1,513,368
Loans payable-related parties (NOTE E)	385,853	385,853
Derivative liabilities	1,217,287	601,000
Total Long Term Liabilities	3,206,508	2,500,221
Total Liabilities from continuing operations	5,414,166	4,266,100
Liabilities from discontinued operations (NOTE C)	85,302	130,420
Total liabilities	5,499,469	4,396,520
Deficit:
Common stock, $0.001 par value; 750,000,000 shares authorized, 28,640,141 and 20,987,353 shares issued and outstanding, respectively	28,640	20,987
Common stock to be issued, 751,980 and 283,777, respectively	752	284
Preferred stock B to be issued, 0 and 72.48 shares, respectively	0	72
Additional paid-in-capital	41,423,693	41,738,613
Subscriptions receivable	0	(2,118,309)
Accumulated deficit	(47,326,498)	(44,257,306)
Total deficiency in stockholders' equity	(5,860,913)	(4,601,588)
Noncontrolling interest	659,489	669,424
Total Deficit	(5,201,424)	(3,932,164)
Total Liabilities and Deficit	298,045	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	0	1,570
Series C Preferred Stock [Member]
Deficit:
Preferred shares, value, issued	$ 0	$ 0

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NOTE J - SUBSEQUENT EVENTS (Details) (USD $)	9 Months Ended	1 Months Ended		2 Months Ended
	Jan. 31, 2015	Mar. 05, 2015	Mar. 01, 2015	Dec. 19, 2014	Apr. 30, 2014
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Stock Issued During Period, Value, New Issues	$ 725,892
Conversion of Convertible Notes and Accrued Interest [Member] | Subsequent Event [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued (in Shares)		2,114,322
Debt Conversion, Original Debt, Amount		94,330
Conversion of Convertible Notes and Accrued Interest [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued (in Shares)	2,468,771
Debt Conversion, Original Debt, Amount	602,263
Common stock to be issued, shares (in Shares)	82,143				122,451
Stock Issued to Note Holder Pursuant to Terms of Note [Member] | Subsequent Event [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued (in Shares)		185,952
Debt Conversion, Original Debt, Amount		40,592
Common stock to be issued, shares (in Shares)		272,331
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)	367,340
Debt Conversion, Original Debt, Amount	94,141
Common stock to be issued, shares (in Shares)					24,809
Stock Issued for Accounts Payable [Member] | Subsequent Event [Member] | Stock Issued to Consultants [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Debt Conversion, Original Debt, Amount		12,000
Stock Issued for Accounts Payable [Member] | Subsequent Event [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued (in Shares)		100,000
Stock Issued for Accounts Payable [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued (in Shares)	138,160
Debt Conversion, Original Debt, Amount	47,064
Common stock to be issued, shares (in Shares)					20,000
Convertible Notes Payable [Member] | Subsequent Event [Member] | Note Convertible at Holder's Option #15 [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Debt Instrument, Face Amount		27,500
Debt Instrument, Interest Rate, Stated Percentage		5.00%
Debt Instrument, Maturity Date		Feb. 25, 2017
Debt Instrument, Convertible, Terms of Conversion Feature		The note is convertible at the note holder’s option at a variable conversion of 70% multiplied by the average of the three lowest closing prices in the twenty 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.
Debt Instrument, Description		This lender has committed to lend the Company an additional $137,500 under the same terms so long as the Company continues to meet the current information requirements under Rule 144 of the Securities Act of 1933, as amended
Convertible Notes Payable [Member] | Subsequent Event [Member] | Note Convertible at Holder's Option #16 [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Debt Instrument, Face Amount		33,000
Debt Instrument, Interest Rate, Stated Percentage		8.00%
Debt Instrument, Maturity Date		Nov. 24, 2015
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 Convertible at Company's Option #6 [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Debt Instrument, Interest Rate, Stated Percentage		10.00%
Debt Instrument, Maturity Date			Feb. 02, 2016
Proceeds from Notes Payable		25,000
Debt Instrument, Convertible, Conversion Price (in Dollars per share)			$ 0.15
Convertible Notes Payable [Member] | Subsequent Event [Member] | Note Convertible at Holder's Option #17 [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Debt Instrument, Face Amount			55,000
Debt Instrument, Interest Rate, Stated Percentage			5.00%
Debt Instrument, Convertible, Terms of Conversion Feature			The notes are convertible at the note holder’s option at a variable conversion of 60% multiplied by the lowest closing prices 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.
Number of Notes			2
Convertible Notes Payable [Member] | Subsequent Event [Member] | Note Convertible at Holder's Option #17-A [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Debt Instrument, Face Amount			27,500
Convertible Notes Payable [Member] | Subsequent Event [Member] | Note Convertible at Holder's Option #17-B [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Debt Instrument, Face Amount			27,500
Convertible Notes Payable [Member] | Subsequent Event [Member] | Note Payable #1 [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Debt Instrument, Maturity Date				Feb. 25, 2017
Convertible Notes Payable [Member] | Subsequent Event [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Common Stock, Capital Shares Reserved for Future Issuance (in Shares)			8,387,569
Loans Payable [Member] | Subsequent Event [Member] | Note Payable #5 [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Debt Instrument, Face Amount			50,000
Debt Instrument, Interest Rate, Stated Percentage			20.00%
Debt Instrument, Maturity Date			Aug. 26, 2015
Loans Payable [Member] | Note Payable #1 [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Stock Issued During Period, Shares, Other (in Shares)	1,000
Debt Instrument, Face Amount	25,000
Debt Instrument, Maturity Date	May 31, 2015
Subsequent Event [Member] | Stock Issued for Cash [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Stock Issued During Period, Shares, New Issues (in Shares)		1,296,830
Number of Accredited Investors		4
Stock Issued During Period, Value, New Issues		77,781
Common stock to be issued, shares (in Shares)		367,462
Subsequent Event [Member] | Shares Previously Classified to be Issued [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Stock Issued During Period, Shares, Other (in Shares)		428,613
Stock Issued for Cash [Member]
NOTE J - SUBSEQUENT EVENTS (Details) [Line Items]
Stock Issued During Period, Shares, New Issues (in Shares)	4,268,295
Number of Accredited Investors	18
Stock Issued During Period, Value, New Issues	$ 725,892

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)	9 Months Ended
	Jan. 31, 2015	Jan. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$ (3,069,192)	$ (1,984,681)
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustment for reverse split	14	(72)
Dividend on preferred stock	573	118,288
Loss allocable to non-controlling interest	(9,935)	(43,260)
Depreciation and amortization	2,690	3,675
Amortization of debt discount	554,568	295,813
Change in fair value of derivative liabilities	47,583	104,483
Shares issued for finance cost	94,142	51,641
Equity based compensation	382,377	206,511
(Increase) decrease in operating assets:
Accounts receivable	60,516	(132,724)
Other assets	2,452	9,140
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses	152,659	26,640
Net cash used in operating activities	(1,781,553)	(1,344,546)
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	725,892	938,400
Net proceeds from convertible notes	1,177,625	621,163
Net payments on notes payable	(177,500)	(144,500)
Net payment of other notes	0	(30,000)
Net payment of other related parties	0	(7,407)
Net cash provided by financing activities	1,726,017	1,377,656
Cash flows from discontinued operations:
Cash used in operating activities of discontinued operations	(7,738)	(14,937)
Net Cash flow from discontinued operation	(7,738)	(14,937)
Net (decrease) increase in cash	(63,274)	18,173
Unrestricted cash and cash equivalents, beginning of period	70,456	38,213
Unrestricted cash and cash equivalents, end of period	7,182	56,386
Cash paid for:
Interest	2,405	16,124
Income taxes	$ 944	$ 5,064

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NOTE D - NOTES PAYABLE (Details) - Schedule of Notes Payble (USD $)	Jan. 31, 2015		Apr. 30, 2014
NOTE D - NOTES PAYABLE (Details) - Schedule of Notes Payble [Line Items]
Note payable, gross	$ 3,125,263		$ 2,316,263
Less, Debt discount	(688,031)		(296,384)
Total	2,437,232		2,019,879
Convertible Notes Payable [Member] | Note Convertible at Holder's Option [Member]
NOTE D - NOTES PAYABLE (Details) - Schedule of Notes Payble [Line Items]
Note payable, gross	2,600,263	[1]	1,901,263	[1]
Convertible Notes Payable [Member] | Note Convertible at Company's Option [Member]
NOTE D - NOTES PAYABLE (Details) - Schedule of Notes Payble [Line Items]
Note payable, gross	285,000	[2]	390,000	[2]
Loans Payable [Member]
NOTE D - NOTES PAYABLE (Details) - Schedule of Notes Payble [Line Items]
Note payable, gross	$ 240,000	[3]	$ 25,000	[3]

[1] Notes convertible at holder's option consists of: (i) a $1,293,368, 8% note originally 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, convertible at the holder's option at $0.495 per share. The Company had recorded a $663,403 beneficial conversion discount for this note which was fully amortized during fiscal 2014; (ii) (a) a $56,500, 6% note due June 30, 2015, and (b) a $40,000 note due December 23, 2015 The Company has recorded beneficial conversion discounts totaling $85,465 for the notes. The discounts are 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 4,753,694 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 eighteen percent until the note is paid in full; (iii) (a) a $25,000, 12% convertible note due May 27, 2014 (the "Debenture"). The Debenture 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 Paragraph 12 of the Debenture, 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 (b) 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%. On one $25,000 note which had been past due, the Company is paying 667 monthly penalty shares until the note is paid in full. 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 December 16, 2015. This is the final tranche of a $165,000 note. 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. The Company has recorded a $29,333 beneficial conversion discount for the note. The discount is being fully amortized over the initial term of the note; (vii) (a) a $27,500, 5% convertible note due January 28, 2015, (b) a $27,500, 5% convertible note due April 29, 2015 and (c) a $27,500 convertible note due January 28, 2016. 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 Company is only required to repay the amount funded and the Company is not required to repay any unfunded portion of this note. The maturity date of each note is one year from the effective date of each payment and is the date upon which the principal sum of this note, as well as any unpaid interest and other fees, shall be due and payable. The conversion price for the notes is the lesser of $0.60 or 70% of the lowest closing price during the 20 trading days immediately 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 $59,437 beneficial conversion discount for the notes. The discounts are being fully amortized over the terms of the notes; (d) $500 outstanding balance on a $13,900, 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. (viii) three, $55,000 8% convertible notes due February 25, 2015, April 27, 2015, and January 26, 2016. The 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 $128,494 beneficial conversion discount for the notes. The discount is being fully amortized over the initial term of the notes. The Company had reserved up to 5,951,586 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 fifteen percent until the notes are paid in full; (ix) (a) a $32,500, 8% note due June 3, 2015; (b) a $33,000, 8% note due July 14, 2015; (c) a $33,000, 8% note due August 16, 2015 ; and (d) a $33,000, 8% note due October 5, 2015. The Company has recorded a beneficial conversion discount of $86,721 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 has reserved up to 3,500,000 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; (x) 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 (xi) (a) 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"); (b) 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") ;(c) $52,500 outstanding under a 12% note due December 22, 2015. The Company has recorded a beneficial conversion discount of $67,806 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 twenty 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"); and (d) a $55,000, 12% note due June 22, 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 twenty 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 3,673,750 shares of its common stock for conversion pursuant to the terms of the notes. (xii) (a) $55,000 outstanding under a $220,000, 10% note due May 24, 2015 and (b) $55,000 outstanding under the same note due July 27, 2015. The Company has recorded a beneficial conversion discount of $105,364 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 of 58% multiplied by the lowest trading price 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 7,000,000 shares of its common stock for conversion pursuant to the terms of the notes. (xiii) a $55,125, 8% convertible note due December 9, 2015. The Company has recorded a beneficial conversion discount of $55,000 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 60% multiplied by the average of the three lowest 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"). The Company had reserved up to 1,654,000 shares of its common stock for conversion pursuant to the terms of the note. (xiv) a $50,000, 10% convertible note due December 15, 2015. The Company has recorded a beneficial conversion discount of $39,400 for the note. The discount is being fully amortized over the term of the notes. The note is convertible at the note holder's option at a variable conversion prices such that during the period during which the note is outstanding at 58% multiplied by the average of the three lowest closing bid prices 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").

[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 $210,000, 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; (iii) 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 and pay the holder 1,000 shares per month for each month or fraction thereof the note remains unpaid; and (iv) a $100,000, 8% note due July 31, 2016. This note is collateralized by a security deposit in the amount of $76,610 held by the Company's landlord.

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NOTE D - NOTES PAYABLE (Tables)

9 Months Ended

Jan. 31, 2015

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

Schedule of Debt [Table Text Block]

Notes Payable	January 31, 2015			April 30, 2014
Notes convertible at holder’s option (a)	$	2,600,263		$	1,901,263
Notes with interest only convertible at Company’s option (b)		285,000			390,000
Non-convertible notes payable (c)		240,000			25,000
Subtotal		3,125,263			2,316,263
Less, Debt discount		(688,031	)		(296,384	)
Total	$	2,437,232		$	2,019,879

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

     (i)                            a $1,293,368, 8% note originally 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, convertible at the holder’s option at $0.495 per share. The Company had recorded a $663,403 beneficial conversion discount for this note which was fully amortized during fiscal 2014; 

 (ii)                           (a) a $56,500, 6% note due June 30, 2015, and (b) a $40,000 note due December 23, 2015 The Company has recorded beneficial conversion discounts totaling $85,465 for the notes. The discounts are 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 4,753,694 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 eighteen percent until the note is paid in full;

 (iii)                          (a) a $25,000, 12% convertible note due May 27, 2014 (the “Debenture”). The Debenture 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 Paragraph 12 of the Debenture, 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 (b) 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%. On one $25,000 note which had been past due, the Company is paying 667 monthly penalty shares until the note is paid in full. 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 December 16, 2015. This is the final tranche of a $165,000 note. 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. The Company has recorded a $29,333 beneficial conversion discount for the note. The discount is being fully amortized over the initial term of the note;

 (vii)                         (a) a $27,500, 5% convertible note due January 28, 2015, (b) a $27,500, 5% convertible note due April 29, 2015 and (c) a $27,500 convertible note due January 28, 2016. 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 Company is only required to repay the amount funded and the Company is not required to repay any unfunded portion of this note.  The maturity date of each note is one year from the effective date of each payment and is the date upon which the principal sum of this note, as well as any unpaid interest and other fees, shall be due and payable.  The conversion price for the notes is the lesser of $0.60 or 70% of the lowest closing price during the 20 trading days immediately 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 $59,437 beneficial conversion discount for the notes. The discounts are being fully amortized over the terms of the notes; (d) $500 outstanding balance on a $13,900, 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.

 (viii)                        three, $55,000 8% convertible notes due February 25, 2015, April 27, 2015, and January 26, 2016. The 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 $128,494 beneficial conversion discount for the notes. The discount is being fully amortized over the initial term of the notes. The Company had reserved up to 5,951,586 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 fifteen percent until the notes are paid in full;  

 (ix)                           (a) a $32,500, 8% note due June 3, 2015; (b) a $33,000, 8% note due July 14, 2015; (c) a $33,000, 8% note due August 16, 2015 ; and (d) a $33,000, 8% note due October 5, 2015. The Company has recorded a beneficial conversion discount of $86,721 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 has reserved up to 3,500,000 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;

 (x)                            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

 (xi)                           (a) 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”); (b) 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”) ;(c) $52,500 outstanding under a 12% note due December 22, 2015. The Company has recorded a beneficial conversion discount of $67,806 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 twenty 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”); and (d) a $55,000, 12% note due June 22, 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 twenty 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 3,673,750 shares of its common stock for conversion pursuant to the terms of the notes.

 (xii)                          (a) $55,000 outstanding under a $220,000, 10% note due May 24, 2015 and (b) $55,000 outstanding under the same note due July 27, 2015. The Company has recorded a beneficial conversion discount of $105,364 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 of 58% multiplied by the lowest trading price 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 7,000,000 shares of its common stock for conversion pursuant to the terms of the notes. 

 (xiii)                         a $55,125, 8% convertible note due December 9, 2015. The Company has recorded a beneficial conversion discount of $55,000 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 60% multiplied by the average of the three lowest 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”). The Company had reserved up to 1,654,000 shares of its common stock for conversion pursuant to the terms of the note. 

 (xiv)                        a $50,000, 10% convertible note due December 15, 2015.  The Company has recorded a beneficial conversion discount of $39,400 for the note. The discount is being fully amortized over the term of the notes.   The note is convertible at the note holder’s option at a variable conversion prices such that during the period during which the note is outstanding at 58% multiplied by the average of the three lowest closing bid prices 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”).

(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 $210,000, 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;

 (iii)                          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  and pay the holder 1,000 shares per month for each month or fraction thereof the note remains unpaid; and

 (iv)                          a $100,000, 8% note due July 31, 2016. This note is collateralized by a security deposit in the amount of $76,610 held by the Company’s landlord.

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 January 31, 2015 resulting in a loss to the consolidated statement of operations of $47,583 for the nine months ended January 31, 2015 and a loss to the consolidated statement of operations of $56,287 for the three months ended January 31, 2015.

Note Derivative Liability and Warrant Derivative Liability:	January 31, 2015
Opening balance, April 30, 2014	$	601,000
Derivative liability reclassified to additional paid in capital		(151,127	)
Derivative financial liability arising on the issue of convertible notes		1, 321,982
Fair value adjustments		(554,568	)
Closing balance	$	1,217,287

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 January 31, 2015 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	0.143% to 0.695		%
Expected stock price volatility			168	%
Expected dividend payout			0
Expected options life in years	Ranging from	.83 year to 2.73		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 January 31, 2015 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	0.01% to 0.145		%
Expected stock price volatility			168	%
Expected dividend payout			0
Expected options life in years	Ranging from	.0 year to1		year

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NOTE D - NOTES PAYABLE (Details) - Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques (Warrant [Member], USD $)	9 Months Ended
	Jan. 31, 2015
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Expected stock price volatility	168.00%
Expected dividend payout (in Dollars per share)	0
Minimum [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Risk free interest rate	0.143%
Expected options life in years	83 years
Maximum [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Risk free interest rate	0.695%
Expected options life in years	2 years 266 days

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NOTE H - FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Jan. 31, 2015

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 our financial liabilities as of January 31, 2015:

	Fair Value at		Fair Value Measurement Using
	January 31,
	2015		Level 1		Level 2		Level 3
Derivative liability	$	1,217,287	$	-	$	-	$	1,217,287

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

Changes in Derivative liability during the nine months ended January 31, 2015 were:

			Increased		Decrease
	April 30,		During		in Fair		January 31,
	2014		Period		Value		2015
Derivative liability	$	601,000	$	1,249,787	$	633,499	$	1,217,287
Total	$	601,000	$	1,249,787	$	633,499	$	1,217,287

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NOTE A - SUMMARY OF ACCOUNTING POLICIES

9 Months Ended

Jan. 31, 2015

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 unaudited condensed consolidated financial statements follows.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements as of January 31, 2015 and for the three and nine month periods ended January 31, 2015 and 2014 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.

Business

Sparta Commercial Services, Inc. ("Sparta" "we," "us," or the "Company") is a Nevada corporation. We are a technology company that develops and markets 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, race track, restaurants, 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 nine months ended January 31, 2015 are not necessarily indicative of the results to be expected for 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 the Company’s entire 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 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 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, “Accounting for Uncertainty in Income Taxes 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 also provides guidance on derecognition, classification, treatment of interest and penalties, and disclosure of such positions.  As a result of implementing ASC 740, there has been no adjustment to the Company’s financial statements and the adoption of ASC 740 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 nine months ended January 31, 2015.

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 January 31, 2015 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 280-10”).  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, “Stock Compensation”, (“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 three months ended January 31, 2015 and 2014, the Company incurred zero and $26,650 in advertising costs, respectively. During the nine months ended January 31, 2015 and 2014, the Company incurred $3,919 and $41,000 in advertising costs, 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 $0.06 and $0.05 for the three months ended January 31, 2015 and 2014, respectively, and $0.13 and $0.12 for the nine months ended January 31, 2015 and 2014, respectively.  At January 31, 2015 and 2014, 1,925,853 and 5,759,888 common equivalent 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 of $3,069,192 and $1,984,681 during the nine months ended January 31, 2015, and 2014, respectively and $3,265,648 for the year end April 30, 2014.  The Company had a negative net worth of $5,201,424 at January 31, 2015.

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 $)	Jan. 31, 2015	Apr. 30, 2014
Accumulated depreciation and amortization (in Dollars)	$ 202,057	$ 199,367
Beneficial Conversion Feature (in Dollars)	688,031	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	750,000,000	750,000,000
Common stock, shares issued	28,640,141	20,987,353
Common stock, shares outstanding	28,640,141	20,987,353
Common stock to be issued	751,980	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	0	157
Preferred stock, shares outstanding	0	157
Preferred stock, redemption value (in Dollars)	10,000	10,000
Preferred Stock, Shares to be Issued	0	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

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NOTE K - GOING CONCERN MATTERS

9 Months Ended

Jan. 31, 2015

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 January 1, 2001 (date of inception) through January 31, 2015, the Company incurred loss of $47,326,498.  Of these losses, $3,069,192 was incurred in the nine months ending January 31, 2015 and $1,984,681 in the nine months ending January 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 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	9 Months Ended
	Jan. 31, 2015	Mar. 19, 2015
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		33,891,110
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	Jan. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3

XML

Accounting Policies, by Policy (Policies)

9 Months Ended

Jan. 31, 2015

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements as of January 31, 2015 and for the three and nine month periods ended January 31, 2015 and 2014 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.

Business

Sparta Commercial Services, Inc. ("Sparta" "we," "us," or the "Company") is a Nevada corporation. We are a technology company that develops and markets 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, race track, restaurants, 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 nine months ended January 31, 2015 are not necessarily indicative of the results to be expected for the full year ending April 30, 2015.

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 the Company’s entire 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 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 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, “Accounting for Uncertainty in Income Taxes 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 also provides guidance on derecognition, classification, treatment of interest and penalties, and disclosure of such positions.  As a result of implementing ASC 740, there has been no adjustment to the Company’s financial statements and the adoption of ASC 740 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 nine months ended January 31, 2015.

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 January 31, 2015 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 280-10”).  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, “Stock Compensation”, (“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 three months ended January 31, 2015 and 2014, the Company incurred zero and $26,650 in advertising costs, respectively. During the nine months ended January 31, 2015 and 2014, the Company incurred $3,919 and $41,000 in advertising costs, 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 $0.06 and $0.05 for the three months ended January 31, 2015 and 2014, respectively, and $0.13 and $0.12 for the nine months ended January 31, 2015 and 2014, respectively.  At January 31, 2015 and 2014, 1,925,853 and 5,759,888 common equivalent 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

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		9 Months Ended
	Jan. 31, 2015	Jan. 31, 2014	Jan. 31, 2015	Jan. 31, 2014
Revenue
Information technology	$ 164,419	$ 99,023	$ 435,300	$ 353,187
Cost of goods sold	49,461	37,390	135,507	113,682
Gross profit	114,958	61,633	299,792	239,505
Operating expenses:
General and administrative	949,993	432,317	2,172,942	1,241,457
Depreciation and amortization	897	897	2,690	3,675
Total operating expenses	950,890	433,214	2,175,632	1,245,132
Loss from continuing operations	(835,932)	(371,581)	(1,875,840)	(1,005,627)
Other (income) expense:
Other income	(1,205)	(21,575)	(16,984)	(59,770)
Interest expense and financing cost, net	126,385	63,117	312,417	159,249
Non-cash financing costs	33,523	14,769	94,141	26,872
Amortization of debt discount	240,503	99,871	554,568	295,813
(Gain) loss in changes in fair value of derivative liability	56,287	87,638	47,583	104,483
Total other expense	455,493	243,819	991,725	526,646
Net loss from continuing operations	(1,291,425)	(615,401)	(2,867,565)	(1,532,273)
Net loss from discontinued operations	(98,017)	(98,194)	(210,988)	(376,807)
Net Loss	(1,389,442)	(713,595)	(3,078,553)	(1,909,080)
Net loss (gain) attributed to non-controlling interest	(9,316)	21,458	9,935	43,260
Preferred dividend	(191)	(39,764)	(573)	(118,861)
Net loss attributed to common stockholders	$ (1,398,950)	$ (731,901)	$ (3,069,192)	$ (1,984,681)
Basic and diluted loss per share (in Dollars per share)	$ (0.06)	$ (0.04)	$ (0.12)	$ (0.10)
Basic and diluted loss per share attributed to common stockholders (in Dollars per share)	$ (0.06)	$ (0.05)	$ (0.13)	$ (0.12)
Weighted average shares outstanding (in Shares)	22,669,672	15,823,610	23,746,293	15,994,720

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NOTE F - EQUITY TRANSACTIONS

9 Months Ended

Jan. 31, 2015

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE F – EQUITY TRANSACTIONS

On May 18, 2012, 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 stated value per share, and 200,000 shares have been designated as Series C Preferred Stock with a $10 per share liquidation value, and 750,000,000 shares of common stock with $0.001 par value per share.  The Company had 125 and 125 shares of Series A preferred stock issued and outstanding as of January 31, 2015 and April 30, 2014, respectively.  The Company had no and 157 shares of Series B preferred stock issued and outstanding as of January 31, 2015 and April 30, 2014, respectively.  The Company had no shares of Series C preferred stock issued and outstanding as of January 31, 2015 and April 30, 2014, respectively. The Company has 28,640,141 and 20,987,353 shares of common stock issued and outstanding as of January 31, 2015 and April 30, 2014, respectively.

Preferred Stock Series A

During the nine months ended January 31, 2015, there were no transactions in Series A Preferred, however, at January 31, 2015, there were $7,389 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 nine months ended January 31, 2015, pursuant to the terms of the Series B Preferred Stock, the Company redeemed and returned to treasury all shares of Series B Preferred Stock and all shares of to be issued Series B Preferred Stock by exchanging the shares for $2,118,309 of note subscription receivables and $204,458 of interest receivable thereon. Subsequent to this redemption there were no shares of Series B Preferred Stock outstanding and there were no shares of Series B Preferred Stock payable.

Preferred Stock Series C

No shares of Preferred Stock Series C were issued during the nine months ended January 31, 2015.

Common Stock

During the nine months ended January 31, 2015 and the nine months ended January 31, 2014, the Company expensed  $382,377 and $206,511, respectively, for non-cash charges related to stock and option compensation expense.

During the nine months ended January 31, 2015, the Company:

●  sold 4,268,295 shares of common stock to eighteen accredited investors for $725,892, of which 351,269 shares remained to be issued at January 31, 2015,

●  issued 2,468,771 shares of common stock upon the conversion of convertible notes and accrued interest in the amount of $602,263, of which 122,451 shares were classified as to be issued at April 30, 2014 and 82,143 shares remained to be issued at January 31, 2015,

●  issued 367,340 shares of common stock valued at $94,141 pursuant to terms of various notes of which no shares remained to be issued at January 31, 2015, and 24,809 shares were classified as to be issued at April 30, 2014,

● issued 811,509 shares of common stock valued at $304,917 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 $77,460 to three employees in exchange for their outstanding stock purchase options.

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NOTE E - LOANS PAYABLE TO RELATED PARTIES

9 Months Ended

Jan. 31, 2015

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

NOTE E – LOANS PAYABLE TO RELATED PARTIES

As of January 31, 2015 and April 30, 2014, aggregated loans payable, without demand and with no interest, to officers and directors were $385,853 and $385,853, respectively. 

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NOTE G - NONCONTROLLING INTEREST (Tables)

9 Months Ended

Jan. 31, 2015

Noncontrolling Interest [Abstract]

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

For the nine months ended January 31, 2015, the non-controlling interest is summarized as follows:

	Amount
Balance at April 30, 2014	$	669,424
Non-controlling interest’s share of losses		(9,935	)
Balance at January 31, 2015	$	659,489

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

9 Months Ended

Jan. 31, 2015

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

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NOTE I - NON-CASH FINANCIAL INFORMATION

9 Months Ended

Jan. 31, 2015

Disclosure Text Block Supplement [Abstract]

Additional Financial Information Disclosure [Text Block]

NOTE I – NON-CASH FINANCIAL INFORMATION

During the nine months ended January 31, 2015, the Company:  

●  issued 2,468,771 shares of common stock upon the conversion of convertible notes and accrued interest in the amount of $602,263, of which 122,451 shares were classified as to be issued at April 30, 2014 and 82,143 shares remained to be issued at January 31, 2015.

●  issued 367,340 shares of common stock valued at $94,141 pursuant to terms of various notes of which no shares remained to be issued at January 31, 2015.

● 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.

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NOTE G - NONCONTROLLING INTEREST

9 Months Ended

Jan. 31, 2015

Noncontrolling Interest [Abstract]

Noncontrolling Interest Disclosure [Text Block]

NOTE G – NONCONTROLLING INTEREST

For the nine months ended January 31, 2015, the non-controlling interest is summarized as follows:

	Amount
Balance at April 30, 2014	$	669,424
Non-controlling interest’s share of losses		(9,935	)
Balance at January 31, 2015	$	659,489

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NOTE H - FAIR VALUE MEASUREMENTS

9 Months Ended

Jan. 31, 2015

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 our financial liabilities as of January 31, 2015:

	Fair Value at		Fair Value Measurement Using
	January 31,
	2015		Level 1		Level 2		Level 3
Derivative liability	$	1,217,287	$	-	$	-	$	1,217,287

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 nine months ended January 31, 2015 were:

			Increased		Decrease
	April 30,		During		in Fair		January 31,
	2014		Period		Value		2015
Derivative liability	$	601,000	$	1,249,787	$	633,499	$	1,217,287
Total	$	601,000	$	1,249,787	$	633,499	$	1,217,287

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NOTE J - SUBSEQUENT EVENTS

9 Months Ended

Jan. 31, 2015

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE J – SUBSEQUENT EVENTS

In February and through March 5, 2015, the Company:

Issued 2,114,322 shares of common stock upon the conversion of $94,330 of notes and accrued interest thereon.

Sold 1,296,830 shares of common stock to four accredited investors for $77,781, of which 367,462 shares remain to be issued.

Issued, pursuant to the terms of notes, 185,952 shares, with another 272,331 shares be issued, all valued at $40,592.

Issued 100,000 shares of common stock valued at $12,000 as payment for accounts payable.

Issued 428,613 shares listed as to be issued at January 31, 2015.

Borrowed pursuant to a $27,500, 5% note due February 25, 2017.  The note is convertible at the note holder’s option at  a variable conversion of 70% multiplied by the average of the three lowest closing prices in the twenty 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 $137,500 under the same terms 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 November 24, 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 pursuant to a $25,000, 10% note due February 2, 2016. Interest on the note is convertible at the Company’s option at $0.15.

Borrowed pursuant to a $50,000, 20% note due August 26, 2015.

Borrowed $55,000 pursuant to two $27,500, 5% notes both due February 25, 2017.  The notes are convertible at the note holder’s option at  a variable conversion of 60% multiplied by the lowest closing prices 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.

Reserved, pursuant to the terms of these notes, 8,387,569 shares for potential conversion of the notes.

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NOTE D - NOTES PAYABLE (Details) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended		9 Months Ended
	Jan. 31, 2015	Jan. 31, 2014	Jan. 31, 2015	Jan. 31, 2014	Apr. 30, 2014	Apr. 30, 2012	Jan. 13, 2015
NOTE D - NOTES PAYABLE (Details) [Line Items]
Amortization of Debt Discount (Premium)	$ 240,503	$ 99,871	$ 554,568	$ 295,813	$ 417,291
Derivative Liability	1,217,287		1,217,287		601,000
Derivative, Gain (Loss) on Derivative, Net	(56,287)	(87,638)	(47,583)	(104,483)
Debt [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Increase (Decrease) in Derivative Liabilities			671,391
Derivative Liability	1,033,742		1,033,742
Adjustments to Additional Paid in Capital, Convertible Debt with Conversion Feature			151,127
Warrant [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Increase (Decrease) in Derivative Liabilities			55,104
Derivative Liability	183,544		183,544
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #1 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	1,293,368		1,293,368
Debt Instrument, Interest Rate, Stated Percentage	8.00%		8.00%
Debt Instrument, Maturity Date			Apr. 30, 2014
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-A [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			Dec. 23, 2015
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #2-B [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	40,000		40,000
Convertible Notes Payable [Member] | 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, Convertible, Beneficial Conversion Feature			85,465
Debt Instrument, Monthly Penalty Shares (in Shares)			3,333
Interest Expense, Debt			10,000
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #2 [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)	4,753,694		4,753,694
Debt Instrument, Default Interest Rate, Percentage	18.00%		18.00%
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #3-A [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 Paragraph 12 of the Debenture, 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] | Note Convertible at Holder's Option #3-B [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] | Past Due Monthly Penalty [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	25,000		25,000
Stock Issued During Period, Shares, Other (in Shares)			667
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%
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] | Note 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, Maturity Date			Dec. 16, 2015
Debt Instrument, Convertible, Beneficial Conversion Feature			29,333
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. The Company has recorded a $29,333 beneficial conversion discount for the note. The discount is being fully amortized over the initial term of the note;(vii) (a) a $27,500, 5% convertible note due January 28, 2015, (b) a $27,500, 5% convertible note due April 29, 2015 and (c) a $27,500 convertible note due January 28, 2016. 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 Company is only required to repay the amount funded and the Company is not required to repay any unfunded portion of this note. The maturity date of each note is one year from the effective date of each payment and is the date upon which the principal sum of this note, as well as any unpaid interest and other fees, shall be due and payable. The conversion price for the notes is the lesser of $0.60 or 70% of the lowest closing price during the 20 trading days immediately 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 $59,437 beneficial conversion discount for the notes. The discounts are being fully amortized over the terms of the notes; (d) $500 outstanding balance on a $13,900, 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.(viii) three, $55,000 8% convertible notes due February 25, 2015, April 27, 2015, and January 26, 2016. The 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 $128,494 beneficial conversion discount for the notes. The discount is being fully amortized over the initial term of the notes.
Convertible Notes Payable [Member] | Original Convertible Note at Holder's Option #6 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	165,000		165,000
Convertible Notes Payable [Member] | Note 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			Jan. 28, 2015
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			Apr. 29, 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, Maturity Date			Jan. 28, 2016
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #7 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Convertible, Beneficial Conversion Feature			59,437
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). 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 $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 principal sum due to lender shall be prorated based on the consideration actually paid by lender (plus an approximate 10% original issue discount that is prorated based on the consideration actually paid by the lender as well as any other interest or fees) such that the Company is only required to repay the amount funded and the Company is not required to repay any unfunded portion of this note.
Debt Instrument, Maturity Date, Description			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] | Note 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, 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.
Convertible Notes Payable, Current	500		500
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #8 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	8.00%		8.00%
Debt Instrument, Convertible, Beneficial Conversion Feature			128,494
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)	5,951,586		5,951,586
Number of Notes			3
Debt Instrument, Debt Default, Description of Violation or Event of Default			In the event the notes are not paid when due, the interest rate is increased to fifteen percent until the notes are paid in full
Convertible Notes Payable [Member] | Note 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, 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] | Note Convertible at Holder's Option #8-C [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	55,000		55,000
Debt Instrument, Maturity Date			Jan. 26, 2016
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #9-A [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-B [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, Maturity Date			Jul. 14, 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	33,000		33,000
Debt Instrument, Interest Rate, Stated Percentage	8.00%		8.00%
Debt Instrument, Maturity Date							Aug. 16, 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, Maturity Date			Oct. 05, 2015
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #9 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Convertible, Beneficial Conversion Feature			86,721
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)	3,500,000		3,500,000
Debt Instrument, Debt Default, Description of Violation or Event of Default			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
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #10 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	0.05		0.05
Debt Instrument, Maturity Date			Apr. 15, 2016
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, 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 eighteen percent until the note is paid in full; and
Convertible Notes Payable	44,770		44,770
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #11-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”)
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #11-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”)
Convertible Notes Payable [Member] | Note Convertible at Holder's Option 11-C [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	52,500		52,500
Debt Instrument, Interest Rate, Stated Percentage	12.00%		12.00%
Debt Instrument, Maturity Date			Dec. 22, 2015
Debt Instrument, Convertible, Beneficial Conversion Feature			67,806
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 twenty 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] | Note Convertible at Holder's Option #11-D [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			Jun. 22, 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 twenty 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] | Note Convertible at Holder's Option #11 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Common Stock, Capital Shares Reserved for Future Issuance (in Shares)	3,673,750		3,673,750
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #12-A [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	220,000		220,000
Debt Instrument, Interest Rate, Stated Percentage	10.00%		10.00%
Debt Instrument, Maturity Date			May 24, 2015
Notes Payable	55,000		55,000
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, Maturity Date			Jul. 27, 2015
Debt Instrument, Convertible, Beneficial Conversion Feature			105,364
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #12 [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 of 58% multiplied by the lowest trading price 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)	7,000,000		7,000,000
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #13 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	55,125		55,125
Debt Instrument, Interest Rate, Stated Percentage	8.00%		8.00%
Debt Instrument, Maturity Date			Dec. 09, 2015
Debt Instrument, Convertible, Beneficial Conversion Feature			55,000
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 lowest 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”).
Common Stock, Capital Shares Reserved for Future Issuance (in Shares)	1,654,000		1,654,000
Convertible Notes Payable [Member] | Note Convertible at Holder's Option #14 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	50,000		50,000
Debt Instrument, Interest Rate, Stated Percentage	10.00%		10.00%
Debt Instrument, Maturity Date			Dec. 15, 2015
Debt Instrument, Convertible, Beneficial Conversion Feature			39,400
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 note is outstanding at 58% multiplied by the average of the three lowest closing bid prices 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”).
Convertible Notes Payable [Member] | 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] | Note Convertible at Company's Option #3 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	210,000		210,000
Debt Instrument, Interest Rate, Stated Percentage	12.462%		12.462%
Debt Instrument, Maturity Date			Apr. 30, 2014
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] | 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
Stock Issued During Period, Shares, Other (in Shares)			5,000
Debt Instrument, Payment Terms			May 31, 2015
Convertible Notes Payable [Member] | 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, Maturity Date			May 31, 2015
Stock Issued During Period, Shares, Other (in Shares)			1,000
Loans Payable [Member] | Note 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%
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, Interest Rate, Stated Percentage	8.00%		8.00%
Debt Instrument, Maturity Date			Dec. 31, 2014
Number of Notes			40,000
Debt Instrument, Payment Terms			The Company agreed to issue 10,000 shares of restricted common stock as an inducement for the loan and pay the holder 1,000 shares per month for each month or fraction thereof the note remains unpaid
Loans Payable [Member] | Note Payable #4 [Member]
NOTE D - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	100,000		100,000
Debt Instrument, Interest Rate, Stated Percentage	8.00%		8.00%
Debt Instrument, Maturity Date			Jul. 31, 2016
Debt Instrument, Collateral Amount	$ 76,610		$ 76,610

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

9 Months Ended

Jan. 31, 2015

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.

	Nine Months Ended
	January 31,			January 31,
	2015			2014
Revenues	$	32,394		$	78,447
Net (loss)	$	(210,988	)	$	(376,807	)

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

Motorcycles and other vehicles under operating leases at January 31, 2015 and April 30, 2014:

	January 31,			April 30,
	2015			2014
Motorcycles and other vehicles	$	33,518		$	60,686
Less: accumulated depreciation		(9,145	)		(5,017	)
Motorcycles and other vehicles, net of accumulated depreciation		24,373			55,669
Less: estimated reserve for residual values		(2,437	)		(4,252	)
Motorcycles and other vehicles under operating leases, net	$	21,936		$	51,417

Schedule of Short-term Debt [Table Text Block]

	January 31,		April 30,
	2015		2014
Secured, subordinated  individual lender (a)	$	72,018	$	117,508
Secured, subordinated individual lender (b)		12,080		12,912
Total	$	85,302	$	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 January 31, 2015 is 15.29%.

(b)   On October 31, 2008, the Company purchased certain loans secured by a portfolio of secured motorcycle leases (“Purchased Portfolio”) for a total purchase price of $100,000.  The Company paid $80,000 at closing, $10,000 in April 2009 and agreed to pay the remaining $10,000 upon receipt of additional Purchase Portfolio documentation. As of 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, 2011, the holder converted $50,000 of the outstanding balance of the Senior Secured Note into 60,606 shares of the Company’s restricted common stock. The Senior Secured Note, which had an outstanding balance of $12,080 at January 31, 2015, has been extended to May 1, 2015.

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

At January 31, 2015, the notes payable mature as follows:

Year ended January 31,	Amount
2016	$	85,302
Total Due	$	85,302

XML

NOTE A - SUMMARY OF ACCOUNTING POLICIES (Details) - Schedule of Estimated Useful Lives of Property and Equipment	9 Months Ended
	Jan. 31, 2015
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		9 Months Ended
	Jan. 31, 2015	Jan. 31, 2014	Jan. 31, 2015	Jan. 31, 2014
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Balance at April 30, 2014			$ 669,424
Non-controlling interest’s share of losses	9,316	(21,458)	(9,935)	(43,260)
Balance at January 31, 2015	659,489		659,489
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
Non-controlling interest’s share of losses			(9,935)
Balance at January 31, 2015	$ 659,489		$ 659,489

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CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED) (USD $)	Series A Preferred Stock [Member] USD ($)	Series B Preferred Stock [Member] USD ($)	Series B Preferred Stock to be Issued [Member]	Common Stock [Member] USD ($)	Common Stock To Be Issued [Member] USD ($)	Subscriptions Receivable [Member] USD ($)	Additional Paid-in Capital [Member] USD ($)	Retained Earnings [Member] USD ($)	Noncontrolling Interest [Member] USD ($)	Total USD ($)
Balance at Apr. 30, 2014	$ 12,500	$ 1,570		$ 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	72	20,987,353	283,777
Correcting					(1)		15			15
Correcting (in Shares)				345	(430)
Redemption of preferred B stock		(1,570)				2,118,309	(2,309,678)			(193,011)
Redemption of preferred B stock (in Shares)		(157)	(72)
Derivative liability reclassification							151,127			151,127
Sale of common stock				3,918	351		721,623			725,892
Sale of common stock (in Shares)				3,917,026	351,269
Shares issued for financing cost				368	(24)		93,798			94,141
Shares issued for financing cost (in Shares)				367,340	(24,809)
Shares issued for conversion of notes, interest and accounts payable				2,524	82		646,721			649,327
Shares issued for conversion of notes, interest and accounts payable (in Shares)				2,524,788	82,143
Stock compensation				812	60		304,045			304,917
Stock compensation (in Shares)				811,509	60,000
Employee stock & options expense				32			77,428			77,460
Employee stock & options expense (in Shares)				31,780
Net loss								(3,069,192)	(9,935)	(3,079,127)
Balance at Jan. 31, 2015	$ 12,500	$ 0		$ 28,640	$ 753	$ 0	$ 41,423,691	$ (47,326,498)	$ 659,489	$ (5,201,424)
Balance (in Shares) at Jan. 31, 2015	125	0	0	28,640,141	751,950

XML

NOTE D - NOTES PAYABLE

9 Months Ended

Jan. 31, 2015

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

NOTE D – NOTES PAYABLE

Notes Payable	January 31, 2015			April 30, 2014
Notes convertible at holder’s option (a)	$	2,600,263		$	1,901,263
Notes with interest only convertible at Company’s option (b)		285,000			390,000
Non-convertible notes payable (c)		240,000			25,000
Subtotal		3,125,263			2,316,263
Less, Debt discount		(688,031	)		(296,384	)
Total	$	2,437,232		$	2,019,879

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

     (i)                            a $1,293,368, 8% note originally 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, convertible at the holder’s option at $0.495 per share. The Company had recorded a $663,403 beneficial conversion discount for this note which was fully amortized during fiscal 2014; 

 (ii)                           (a) a $56,500, 6% note due June 30, 2015, and (b) a $40,000 note due December 23, 2015 The Company has recorded beneficial conversion discounts totaling $85,465 for the notes. The discounts are 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 4,753,694 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 eighteen percent until the note is paid in full;

 (iii)                          (a) a $25,000, 12% convertible note due May 27, 2014 (the “Debenture”). The Debenture 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 Paragraph 12 of the Debenture, 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 (b) 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%. On one $25,000 note which had been past due, the Company is paying 667 monthly penalty shares until the note is paid in full. 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 December 16, 2015. This is the final tranche of a $165,000 note. 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. The Company has recorded a $29,333 beneficial conversion discount for the note. The discount is being fully amortized over the initial term of the note;

 (vii)                         (a) a $27,500, 5% convertible note due January 28, 2015, (b) a $27,500, 5% convertible note due April 29, 2015 and (c) a $27,500 convertible note due January 28, 2016. 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 Company is only required to repay the amount funded and the Company is not required to repay any unfunded portion of this note.  The maturity date of each note is one year from the effective date of each payment and is the date upon which the principal sum of this note, as well as any unpaid interest and other fees, shall be due and payable.  The conversion price for the notes is the lesser of $0.60 or 70% of the lowest closing price during the 20 trading days immediately 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 $59,437 beneficial conversion discount for the notes. The discounts are being fully amortized over the terms of the notes; (d) $500 outstanding balance on a $13,900, 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.

 (viii)                        three, $55,000 8% convertible notes due February 25, 2015, April 27, 2015, and January 26, 2016. The 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 $128,494 beneficial conversion discount for the notes. The discount is being fully amortized over the initial term of the notes. The Company had reserved up to 5,951,586 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 fifteen percent until the notes are paid in full;  

 (ix)                           (a) a $32,500, 8% note due June 3, 2015; (b) a $33,000, 8% note due July 14, 2015; (c) a $33,000, 8% note due August 16, 2015 ; and (d) a $33,000, 8% note due October 5, 2015. The Company has recorded a beneficial conversion discount of $86,721 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 has reserved up to 3,500,000 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;

 (x)                            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

 (xi)                           (a) 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”); (b) 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”) ;(c) $52,500 outstanding under a 12% note due December 22, 2015. The Company has recorded a beneficial conversion discount of $67,806 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 twenty 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”); and (d) a $55,000, 12% note due June 22, 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 twenty 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 3,673,750 shares of its common stock for conversion pursuant to the terms of the notes.

 (xii)                          (a) $55,000 outstanding under a $220,000, 10% note due May 24, 2015 and (b) $55,000 outstanding under the same note due July 27, 2015. The Company has recorded a beneficial conversion discount of $105,364 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 of 58% multiplied by the lowest trading price 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 7,000,000 shares of its common stock for conversion pursuant to the terms of the notes. 

 (xiii)                         a $55,125, 8% convertible note due December 9, 2015. The Company has recorded a beneficial conversion discount of $55,000 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 60% multiplied by the average of the three lowest 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”). The Company had reserved up to 1,654,000 shares of its common stock for conversion pursuant to the terms of the note. 

 (xiv)                        a $50,000, 10% convertible note due December 15, 2015.  The Company has recorded a beneficial conversion discount of $39,400 for the note. The discount is being fully amortized over the term of the notes.   The note is convertible at the note holder’s option at a variable conversion prices such that during the period during which the note is outstanding at 58% multiplied by the average of the three lowest closing bid prices 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”).

(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 $210,000, 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;

 (iii)                          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  and pay the holder 1,000 shares per month for each month or fraction thereof the note remains unpaid; and

 (iv)                          a $100,000, 8% note due July 31, 2016. This note is collateralized by a security deposit in the amount of $76,610 held by the Company’s landlord.

Amortization of Beneficial Conversion Feature for the nine months ended January 31, 2015 and 2014 was $554,568 and $295,813, 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 $671,391 during the nine months ended January 31, 2015 to $1,033,742.  $151,127 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 $55,104 to $183,544 during the nine months ended January 31, 2015.

The change in fair value of the derivative liabilities of warrants outstanding at January 31, 2015 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	0.143% to 0.695		%
Expected stock price volatility			168	%
Expected dividend payout			0
Expected options life in years	Ranging from	.83 year to 2.73		years

The change in fair value of the derivative liabilities of convertible notes outstanding at January 31, 2015 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	0.01% to 0.145		%
Expected stock price volatility			168	%
Expected dividend payout			0
Expected options life in years	Ranging from	.0 year to1		year

The value of the derivative liability was re-assessed as of January 31, 2015 resulting in a loss to the consolidated statement of operations of $47,583 for the nine months ended January 31, 2015 and a loss to the consolidated statement of operations of $56,287 for the three months ended January 31, 2015.

Note Derivative Liability and Warrant Derivative Liability:	January 31, 2015
Opening balance, April 30, 2014	$	601,000
Derivative liability reclassified to additional paid in capital		(151,127	)
Derivative financial liability arising on the issue of convertible notes		1, 321,982
Fair value adjustments		(554,568	)
Closing balance	$	1,217,287

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NOTE B - PROPERTY AND EQUIPMENT (Details) (USD $)	3 Months Ended		9 Months Ended
	Jan. 31, 2015	Jan. 31, 2014	Jan. 31, 2015	Jan. 31, 2014
Property, Plant and Equipment [Abstract]
Depreciation, Depletion and Amortization	$ 897	$ 897	$ 2,690	$ 3,675

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NOTE D - NOTES PAYABLE (Details) - Fair Value, Net Derivative Liability Measured on Recurring Basis, Unobservable Input Reconciliation (USD $)	9 Months Ended
	Jan. 31, 2015
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	(151,127)
Derivative financial liability arising on the issue of convertible notes	1,321,982
Fair value adjustments	(554,568)
Derivative Liability	$ 1,217,287

XML

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

9 Months Ended

Jan. 31, 2015

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 January 31, 2015 and April 30, 2014 consist of the followings:

	January 31, 2015			April 30, 2014
Computer equipment, software and furniture	$	209,341		$	209,342
Less: accumulated depreciation		(202,057	)		(199,367	)
Net property and equipment	$	7,284		$	9,975