The next dialogue of our monetary situation and outcomes of operations
must be learn along side (1) our interim unaudited condensed
consolidated monetary statements and their explanatory notes included as half
of this quarterly report, and (2) our annual audited consolidated monetary
statements and explanatory notes for the 12 months ended
in our annual report on Type 10-Okay for that 12 months as filed with the
This report on Type 10-Q comprises varied statements that will represent
“forward-looking statements” inside the that means of Part 27A of the Securities
Act of 1933, as amended, Rule 175 promulgated thereunder, Part 21E of the
Securities Trade Act of 1934, as amended, and Rule 3b-6 promulgated
thereunder which characterize our expectations and beliefs, together with, however not
restricted to statements regarding the Firm’s enterprise and monetary plans and
prospects and are meant to be lined by the protected harbor provisions of the
Personal Securities Litigation Reform Act of 1995. Any statements about our
expectations, beliefs, plans, aims, assumptions or future occasions or
efficiency aren’t historic details and could also be forward-looking. The phrases
“consider,” “anticipate,” “anticipate,” “estimate,” “challenge,” and different related
expressions can, however not all the time, establish forward-looking statements, which
communicate solely as of the date such assertion was made. We base these forward-looking
statements on our present expectations and projections about future occasions, our
assumptions concerning these occasions and our information of details on the time the
statements are made. These statements by their nature contain substantial dangers
and uncertainties, sure of that are past our management, and precise outcomes
could differ materially relying on a wide range of essential elements. Dangers and
uncertainties that might trigger our monetary efficiency to vary materially
from our targets, plans, expectations and projections expressed in forward-looking
statements embody these set forth in our filings with the
Type 10-Okay for the 12 months ended
solely as of the date they’re made. The Firm doesn’t undertake to replace
forward-looking statements to replicate circumstances or occasions that happen after
the date the forward-looking statements are made or to replicate the prevalence of
unanticipated occasions. It is best to take into account any forward-looking statements in
mild of this rationalization, and we warning you about counting on forward-looking
We’re a multi-disciplined guardian company working throughout three enterprise
sectors – Monetary Companies, E-Commerce & Cellular Expertise, and Well being and
Sparta’s roots are within the Powersports trade. The Firm supplied retail
installment loans and leases by way of approved motorbike dealerships in 33
states, with financing supplied by institutional lenders. The Firm additionally
maintained a full underwriting and servicing platform for its portfolio.
However the discontinuance of our preliminary give attention to client loans and
leases put up Lehman and throughout the 2008 monetary disaster; in 2007, the Firm
had launched a brand new initiative, Municipal Financing, (www.spartamunicipal.com),
which has financed over 100 jurisdictions so far. Sparta’s Municipal Finance
program can be presently accessible to all nonprofit organizations, establishments
and entities. All nonprofit organizations which adhere to
together with 501 (c) 3 of the Inside Income Code, are eligible. Each public
nonprofits, often known as public charities supported with publicly collected
funds, and personal nonprofits, often known as personal foundations supported by an
particular person or enterprise entity, qualify for this system.
Automobile Historical past Studies are a staple of Sparta’s E-Commerce Expertise
leisure use, Sparta’s Automobile Historical past Studies are extremely regarded for
accuracy and completeness and have been offered throughout all 50 states and in 62
nations worldwide. They supply a trusted layer of assurance to car patrons
and can be found on
dealership web sites. They embody Cyclechex (Bike Historical past Studies at
www.cyclechex.com), RVchex (Leisure Automobile Historical past Studies at
www.rvchex.com), and Truckchex (Heavy Responsibility Truck Historical past Studies at
www.truckchex.com). Customers, retailers, municipals, nonprofits, public sale
homes, banks and insurance coverage corporations alike scrutinize title historical past experiences for
the important info wanted and factored into essential enterprise choices that
have an effect on the underside line.
The Firm’s E-Commerce and Cellular Expertise subsidiary identify change to iMobile
ever-broadening service choices within the evolving know-how panorama. With
iMobile App (www.imobileapp.com), the Firm gives cell know-how
companies, together with internet and cell utility creation, growth and
administration for a variety of companies to extend income, construct model
recognition, and enhance buyer engagement. Our ever-broadening enterprise base
of cell utility consists of car dealerships and racetracks, personal golf equipment
and nation golf equipment, faculties and leisure venues, eating places and grocery
shops, in addition to varied different service provider sorts.
(www.imobileapp.com/app-gallery). The Firm additionally designs, launches, maintains
and hosts web sites for companies incorporating website positioning (search engine
optimization), social media advertising and marketing, and on-line opinions to enhance their
presence on-line. We offer particular, tailor-made motion plans for our shoppers’
web sites that embody companies akin to eCommerce, CRM (Buyer Relationship
Administration) growth and integration. This practice software program not solely helps
companies talk with prospects however will also be used for workers to
talk internally. The CRM software program could be internet primarily based, built-in with a
cell app, or each. We work with shoppers to grasp their distinctive wants and
incorporate the options and necessities which might be most essential to them and
will facilitate their enterprise progress and success. Correspondingly, the Firm
designs and builds customized kitchen ordering software program for impartial grocery
shops, delicatessens, and different meals service companies. The software program could be
designed to be used in a mix of how together with cell gadgets and in-store
ordering. The kitchen ordering software program is enabled with cost integration,
textual content messaging notification, wi-fi printing, and different options. iMobile
simplify or streamline their kitchen ordering course of. Moreover, we provide
textual content messaging companies, which complement enterprise advertising and marketing methods each to
achieve and retain model loyalty amongst its shoppers, prospects and traders. Our
textual content messaging platform permits our shoppers to simply handle, schedule and
analyze textual content message efficiency.
Sparta created its subsidiary,
the heels of the Agriculture Enchancment Act (often known as the Farm Invoice),
which was signed into legislation the earlier
(CBD) was faraway from Schedule 1 of the Managed Substances Act. Firm
administration acknowledged the substantial enterprise alternative that lay forward within the
quickly increasing hemp-CBD (cannabidiol) market in
2019-2020, we sourced, developed and examined 5 CBD product classes totalling
31 merchandise. We procured premium, domestic-grade, full-spectrum, broad-spectrum,
and THC free hemp, created product packaging and labelling, and applied
fulfilment to launch a web based B to C web site: www.newworldhealthcbd.com on
provides 15 merchandise with plans so as to add complementary merchandise to our product line.
Our CBD merchandise can be found in full spectrum, broad spectrum and
non-detectable beneath the authorized restrict of .3 THC (ND-THC) and are available capsules,
oils, tablets, gel caps, tinctures, salves, lotions, lotions, in addition to pet
chews and tinctures. We stay watchful of client wants, adjusting our product
line choices both by including new merchandise, adjusting the efficiency ranges of
present merchandise or discontinuing nonetheless others, as warranted. To make sure the
security and high quality of our merchandise, all CBD product choices are solely
sourced, manufactured and examined at extremely accredited testing amenities in
excessive requirements, in-depth high quality testing and label transparency, shoppers know
they will belief us.
Sparta’s response to the onset of the COVID 19 pandemic in early 2020 shortly
took form with thorough investigations into evolving buyer traits in well being
and wellness. In consequence, we expanded New World Well being Manufacturers and developed a
new product line of pure dietary dietary supplements. In
on-line B to C web site: www.newworldhealthbrands.com, that includes top quality
dietary dietary supplements, together with nutritional vitamins and minerals, akin to, Zinc, Magnesium,
Boron, Iodine, Beetroot Extract, Selenium,
To make sure the security and high quality of our merchandise, all well being and wellness
choices are solely sourced and manufactured in
adhere to strict
requirements and transparency are tantamount to being a trusted model.
Sparta’s latest subsidiary,
state-of-the-art platform designed to attach customers of broadly adopted digital
currencies with sellers of assorted items and companies. The platform has not
launched and the Firm could make no assurances that the described plan will
attain implementation. As well as, the Firm has accomplished and examined a
cryptocurrency cost gateway known as SpartaPayIQ, www.SpartaPayIQ.com, which is
practical and was formally introduced on
RESULTS OF OPERATIONS
Comparability of the three Months Ended
For the three months ended
gross sales revenues, have incurred vital bills, and have sustained
13.62%, primarily attributable to elevated Revenues from our Data Expertise
Value of Income
Value of income consists of prices and charges paid to 3rd events to assemble
and preserve cell apps, in addition to charges for subscription companies associated to
car historical past experiences.
Working bills have been
in comparison with
inventory primarily based compensation within the present interval.
Bills incurred throughout the present three months interval consisted primarily of the next bills: Improve 2022 2021 (Lower) % Salaries and associated Bills 167,830 133,615 34,215 25.61 % Promoting and Advertising 3,431 - 3,431 100.00 % Normal workplace Bills 41,788 48,764 (6,976 ) -14.31 % Authorized and Skilled Charges 289,907 49,560 240,347 484.96 % Taxes and Licenses 4,692 - 4,962 100.00 % SEC associated Bills 5,515 - 5,515 100.00 % Workplace Hire 16,250 18,085 (1,835 ) 10.15 % Software program Improvement Value 1,500 - 1,500 100.00 % Dangerous Money owed 41,969 - 41,969 100 % Non money bills - - % 572,882 250,024 Different (revenue) expense
Different (revenue) expense is comprised primarily of curiosity and financing prices
the honest worth of our by-product liabilities.
18 Internet revenue (loss)
Our web revenue attributable to frequent stockholders for the three months ended
valuation of by-product liabilities .
LIQUIDITY AND CAPITAL RESOURCES
working loss for the three months of
stream from operations of
deficit outcomes primarily from our web revenue of
honest worth valuation of by-product liabilities of
We met our money necessities throughout the interval by way of proceeds from the sale of
We don’t anticipate incurring vital analysis and growth
expenditures, and we don’t anticipate the sale or acquisition of any
vital property, plant or tools, throughout the subsequent twelve months. At
we absolutely implement our marketing strategy, we anticipate our employment base could
enhance throughout the subsequent twelve months. As we proceed to increase, we are going to incur
extra price for personnel. This potential enhance in personnel depends
upon our producing elevated revenues and acquiring sources of financing. There
isn’t any assure that we are going to achieve success in elevating the funds required or
producing revenues adequate to fund the potential enhance within the variety of
workers. Our workers aren’t represented by a union.
Whereas we’ve got raised capital to satisfy our working capital and financing wants in
the previous, extra financing is required with the intention to meet our present and
potential future money stream deficits from operations.
We proceed to hunt extra financing, which can be within the type of senior
debt, subordinated debt or fairness. We presently don’t have any commitments for
financing that aren’t on the investor’s election. There is no such thing as a assure that we
will probably be profitable in elevating the funds required to assist our operations.
We estimate that we are going to want roughly
working money stream to conduct operations throughout the subsequent twelve months.
Nonetheless, there could be no assurance that extra personal or public financing,
together with debt or fairness financing, will probably be accessible as wanted, or, if
accessible, on phrases favorable to us. Any extra fairness financing could also be
dilutive to stockholders and such extra fairness securities could have rights,
preferences or privileges which might be senior to these of our present frequent or
most popular inventory. Moreover, debt financing, if accessible, would require cost
of curiosity and will contain restrictive covenants that might impose limitations
on our working flexibility. Nonetheless, if we aren’t profitable in producing
adequate liquidity from operations or in elevating adequate capital assets,
on phrases acceptable to us, this might have a fabric opposed impact on our
enterprise, outcomes of operations, liquidity and monetary situation, and we are going to
have to regulate our deliberate operations and growth on a extra restricted scale.
The impact of inflation on our income and working outcomes was not
vital. Our operations are situated in
seasonal facets that will have a fabric impact on our monetary situation or
outcomes of operations.
GOING CONCERN ISSUES
The Firm’s historic losses and the shortage of revenues increase substantial
doubts in regards to the Firm’s skill to proceed as a going concern. If we’re
unable to develop our enterprise, we’ve got to discontinue operations or stop to
exist, which might be detrimental to the worth of the Firm’s frequent inventory. We
could make no assurances that our enterprise operations will develop and supply us
with vital money to proceed operations.
With a purpose to enhance the Firm’s liquidity, the Firm’s administration is
actively pursuing extra financing by way of discussions with funding
bankers, monetary establishments and personal traders. There could be no assurance
the Firm will probably be profitable in its effort to safe extra financing.
We proceed to expertise web working losses. Our skill to proceed as a
going concern is topic to our skill to develop worthwhile operations. We’re
devoting considerably all of our efforts to creating our enterprise and elevating
capital. Our web working losses enhance the issue in assembly such targets
and there could be no assurances that such strategies will show profitable.
The first points administration will give attention to within the speedy future to deal with
this matter embody: in search of extra credit score amenities from institutional
lenders; in search of institutional traders for debt or fairness investments in our
Firm; quick time period interim debt financing: and personal placements of debt and
fairness securities with accredited traders.
To handle these points, we’ve got engaged a monetary advisory agency to advise and
help us in negotiating and elevating capital.
The impression of inflation on the prices of the Firm, and the power to move on
price will increase to its prospects over time depends upon market circumstances.
The Firm will not be conscious of any inflationary pressures which have had any
vital impression on the Firm’s operations over the previous quarter, and the
Firm doesn’t anticipate that inflationary elements can have a major
impression on future operations.
OFF-BALANCE SHEET ARRANGEMENTS
The Firm doesn’t preserve off-balance sheet preparations, nor does it
take part in non-exchange traded contracts requiring honest worth accounting
CRITICAL ACCOUNTING POLICIES
The preparation of our monetary statements in conformity with accounting
ideas typically accepted in
and judgments that have an effect on our reported property, liabilities, revenues, and
bills, and the disclosure of contingent property and liabilities. We base our
estimates and judgments on historic expertise and on varied different
assumptions, we consider to be affordable underneath the circumstances. Future occasions,
nevertheless, could differ markedly from our present expectations and assumptions.
Whereas there are a selection of great accounting insurance policies affecting our
monetary statements, we consider the next essential accounting coverage
entails probably the most complicated, troublesome and subjective estimates and judgments.
In the course of the first quarter of 2018, the Firm adopted ASU 2014-09, Income from
Contracts with Clients (Matter 606), utilizing the cumulative-effect methodology. The
new customary requires an entity to acknowledge income when it transfers promised
items or companies to prospects in an quantity that displays the consideration to
which the entity expects to be entitled in change for these items or companies.
The adoption didn’t have an effect in our consolidated monetary statements,
aside from the enhancement of our disclosures associated to our revenue-generating
The Firm acts as a principal in its income transactions because the Firm is
the first obligor within the transactions.
Revenues from cell app merchandise and New World Well being Manufacturers merchandise are
typically acknowledged upon supply. Revenues from Historical past Studies are typically
acknowledged upon supply / obtain. Prepayments acquired from prospects earlier than
supply (if any) are acknowledged as deferred income and acknowledged upon
supply. The Firm information deferred revenues when money funds are acquired
or due prematurely of our efficiency, together with quantities that are refundable.
20 Data Expertise:
The Firm acknowledges income when the next standards have been met:
persuasive proof of an association exists, no vital Firm obligations
stay, assortment of the associated receivable is fairly assured, and the charges
are fastened or determinable. The Firm acts as a principal in its income
transactions because the Firm is the first obligor within the transactions.
Revenues from cell app merchandise are typically acknowledged upon supply.
Revenues from Historical past Studies are typically acknowledged upon supply / obtain.
Prepayments acquired from prospects earlier than supply (if any) are acknowledged as
deferred income and acknowledged upon supply.
New World Well being Manufacturers:
Revenues from New World Well being Manufacturers merchandise are typically acknowledged upon
Inventory-Primarily based Compensation
The Firm adopted Monetary Accounting Requirements Board Accounting Customary
Codification Matter 718 (“ASC 718-10”), which information compensation expense on a
straight-line foundation, typically over the specific service interval of three to 5
ASC 718-10 requires corporations to estimate the honest worth of share-based cost
awards on the date of grant utilizing an option-pricing mannequin. The worth of the
portion of the award that’s in the end anticipated to vest is acknowledged as
expense over the requisite service durations within the Firm’s Consolidated
Assertion of Operations. The Firm is utilizing the Black-Scholes option-pricing
mannequin as its methodology of valuation for share-based awards. The Firm’s
dedication of honest worth of share-based cost awards on the date of grant
utilizing an option-pricing mannequin is affected by the Firm’s inventory worth as nicely
as assumptions concerning quite a lot of extremely complicated and subjective variables.
These variables embody, however aren’t restricted to the Firm’s anticipated inventory
worth volatility over the time period of the awards, and sure different market variables
akin to the danger free rate of interest.
The Firm’s inventories characterize completed items, include merchandise
accessible on the market and are accounted for utilizing the first-in, first-out (FIFO)
methodology and valued on the decrease of price or web realizable worth. Stock
consists of completed items for the Firm’s New World Well being Manufacturers enterprise.
The Firm evaluates and accounts for conversion choices embedded in its
convertible devices in accordance with skilled requirements for
“Accounting for Spinoff Devices and Hedging Actions” (“ASC 815-40”).
The Firm accounts for convertible devices (when it has decided that
the embedded conversion choices shouldn’t be bifurcated from their host
devices) in accordance with skilled requirements when “Accounting for
skilled requirements pertain to “Sure Convertible Devices.”
Accordingly, the Firm information, when mandatory, reductions to convertible notes
for the intrinsic worth of conversion choices embedded in debt devices primarily based
upon the variations between the honest worth of the underlying frequent inventory at
the dedication date of the notice transaction and the efficient conversion worth
embedded within the notice. Debt reductions underneath these preparations are amortized over
the time period of the associated debt to their earliest date of redemption. The Firm
additionally information when mandatory deemed dividends for the intrinsic worth of
conversion choices embedded in most popular shares primarily based upon the variations
between the honest worth of the underlying frequent inventory on the dedication date of
the notice transaction and the efficient conversion worth embedded within the notice.
ASC 815-40 gives that, amongst different issues, typically, if an occasion will not be
inside the entity’s management might or require web money settlement, then the
contract shall be categorised as an asset or a legal responsibility.
21 Spinoff Liabilities
ASC 815 typically gives three standards that, if met, require corporations to
bifurcate conversion choices from their host devices and account for them as
freestanding by-product monetary devices. These three standards embody
circumstances by which (a) the financial traits and dangers of the
embedded by-product instrument aren’t clearly and carefully associated to the
financial traits and dangers of the host contract, (b) the hybrid
instrument that embodies each the embedded by-product instrument and the host
contract will not be re-measured at honest worth underneath in any other case relevant typically
accepted accounting ideas with adjustments in honest worth reported in earnings
as they happen and (c) a separate instrument with the identical phrases because the embedded
by-product instrument could be thought of a by-product instrument topic to the
necessities of ASC 815. ASC 815 additionally gives an exception to this rule when
the host instrument is deemed to be typical, as described.
RECENT ACCOUNTING PRONOUNCEMENTS
For info concerning latest accounting pronouncements and their impact on
the Firm, see “Latest Accounting Pronouncements” in Be aware A of the Notes to
Consolidated Monetary Statements contained herein.
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