SOURCE: Sparta Commercial Services, Inc.

September 03, 2009 09:03 ET

Sparta Reports Significant Increase in Shareholder Equity

NEW YORK, NY--(Marketwire - September 3, 2009) - Sparta Commercial Services, Inc. (OTCBB: SRCO) is pleased to provide an update to its recently announced plan to eliminate substantially all of its short term debt.

As of today, approximately $4.2 million of notes and accrued interest held by the Company's existing stockholders has been converted into shares of the Company's common stock. As a result of these conversions, Sparta shareholders' equity increased by over $4.2 million. Additionally, holders of approximately $1.8 million in notes and accrued interest have agreed to convert their notes and accrued interest into shares of common stock thereby increasing shareholders' equity by an additional $1.8+ million for a potential total increase in shareholder equity of over $6 million.

Commenting on today's announcement, Anthony Havens, Sparta's CEO, said, "Once the conversion of debt and other previously announced balance sheet enhancements are behind us, we can turn our full focus to utilizing the initial $25 million secured senior credit facility with Autobahn Funding Company LLC and DZ Bank to fully implement the strategies we've developed in recent months to gain broader nationwide market share in the financial services sector of the powersports industry. Because many of our competitors have virtually withdrawn from powersports financing as a result of their exposure to the commercial and residential real estate markets, Sparta has an opportunity to gain substantial market share and we couldn't be more optimistic about the future."

Sparta Commercial Services, Inc., headquartered in New York City, offers consumer financing and leasing products for powersports vehicles, a Municipal Leasing alternative to governmental agencies that require police motorcycles and other equipment, and a Fleet Leasing program for Harley-Davidson dealers that also operate rental programs. With an industry-wide target market estimate of approximately 10,000 retail dealers, Sparta currently has about 2,300 dealers in its Authorized Dealer Network, or approximately 23% of the market.

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are valid only as of today and we disclaim any obligation to update this information. Actual results may differ significantly from management's expectations. These forward-looking statements involve risks and uncertainties that include, among others, risks related to potential future losses, obtaining, satisfying terms of, and amount of credit lines, competition, financing and commercial agreements and strategic alliances, seasonality, potential fluctuations in operating results and rate of growth, management of potential growth, system interruption, consumer and industry trends, limited operating history, and government regulation. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved. Further information regarding these and other risks is described from time to time in the Company's filings with the SEC, which are available on its website at: http://www.sec.gov.

Contact Information

  • Contact:
    Dick Trotter
    COO
    Sparta Commercial Services, Inc.
    (212) 239-2666