Spongetech Delivery Systems, Inc. (fka SPNGQ)

[KLee]

Interpretation of Gersten Savage Letter

http://messages.finance.yahoo.com/Stocks_(A_to_Z)/Stocks_S/threadview?m=tm&bn=100008&tid=153887&mid=153887&tof=5&frt=2

The interpretation of some posters to this letter, dated December 30.2009 that it would be the proof, that SPNG had at that time close to 3 Billion shares outstanding is so wrong, that for me it is almost unbelievable that it had not been taken up before.

I give you an example:

The Board of Directors of SPNG could have passed in December 2009 a resolution not to exceed the present outstanding by a figure of lets say 100,000 shares. So lets say the company at that time had 720 Mil outstanding, they would then been not allowed to go above 720,100,000 Mil. Such a Board Resolution would then be passed to the Transfer Agent, limiting the issuance of shares despite the fact, that the authorized would be 3 Billion. The reason for such a BOD could have been, to limit at all costs the A/S so as not to give room to more shares floating around, once the dust had settled. Means M and M put a freeze on it – shorts please think of it and cry later. As all of you have read the old filings do know, SPNG is protected by the Preferred shares (1 to 100 ) voting rights, so as nobody could use this deep discounted capitalisation to attack the company with a majority clause. (Clever boys, brilliant)

The reason why I come to this conclusion: This Gersten Savage Letter dated December 30.2009 never takes reference to the authorised figure. It only says: 15,050 shares of common stock avalable for issuance. If the outstanding would have been, as some say, close to the 3 Billion, it clearly would have been stipulated. That the bell rings louder on my theory: As this is a public document, Pikes for sure would have seen this before as well, but then he could not file with the SEC his purchases and then still rely on the figure of approx. 720 Mil. It simply doesn't work that way.

To finish this subject: I do know more that 30 cases, where the BOD limited the issuance of shares by a board resolution, despite the fact, that they had a leeway of between 30 % an 70 % between the A/S and the O/S.