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Hello, Kgem. I appreciated your post.
The amount of time we are all willing to wait being unique to all of us. But for me, the following two statements are mutually exclusive.
"...time frame for hearing something of major importance is the end of this month or the first part of March."
"Once the flood gates of news are opened, we could experience wave after wave of fantastic news that could make this investment extremely rewarding."
IF we find that we are operationally and fundamentally as well as we are expecting to be, then I totally agree with your second statement. Wave after wave of fantastic news, leading to a PPS of life-changing proportion. That would be well worth whatever waiting is necessary. And I personally have NO interest in selling this stock for a few pennies, as long as the potential remains for significantly more.
And btw, recent feedback seems to indicate that the delay may have less to do with FINRA obstacles, than it does to issues regarding management.
The journey is one thing, taking its toll on all of us. But the destination promises to be something well worth the wait and the toll.
Forgetting all else, what could and couldn't be, we know we have a major accumulation by Pike; we know about new products in the pipeline, as a result of the various licensing agreements we've secured; and we know our retail footprint is ever-expanding, to now include Walmart.
My lowest offer price remains at $1.50. And I'm only selling very little at that price.
Good luck to you, sir.
jay
I agree with you, puppy.
I am not expecting a MM to submit a 211 sans filings. LOL.
My wondering why FINRA might deny or delay the application was based on the submission otherwise being compliant, inclusive of filings.
stox, good to see you!
your recent postings giving much to be considered. my reply to you last evening evidently deemed "not spongeworthy."
but for now, a quick question.
does it still appear that there is a problem with a timely 211 approval by FINRA? or is the delay due to management manueverings to remain in control? or both?
more later.
thanks,
jay
Kgem, I agree with the replies
provided by loanranger, pantherj, and puppydotcom.
As we collectively try to understand what is going on, we have to evaluate the input shared by fellow posters. I, myself, thought that management was holding off on the filings and PR's until they had assurance that FINRA would approve the 211 in a timely manner. A matter of management not wanting to release that information while on the current trading venue. And also of the understanding that FINRA was less than cooperative in agreeing to an expeditious approval of the 211.
Hence, I began to consider WHY FINRA might deny or delay the application approval. Deducing that the suspension in the last 12 months could present a reason for denial.
How long are we willing to wait? For me, it's as I said. "So in my own worst case scenario, I am assuming that the 211 application won't be approved until the answer to that question is "no," which would be in October."
And in the best case scenario? An after-hours submission of the delinquent filings, and a pre-market approval of the 211, resulting in a change of trading venue overnight.
Hello, wer123
I'm not saying that denial of the 211 application by FINRA is the only logical outcome at this time.
I was responding to a comment by loanranger, in which he said that a suspension in the previous 12 months does not preclude approval of the 211.
I don't disagree with him on that issue.
But I don't think that the question about a suspension, on the 211 application, is irrelevant. I just believe that if the issuer was suspended in the previous 12 months, that it COULD be used as a basis for denial of the 211.
Yes, "probably."
The 211 application can either be approved or denied.
When the question about an SEC investigation is answered in the affirmative, it is entirely logical to assume that it can be used as a basis for denial of the application.
I thought it was, also.
I hope you're right, brainstorming.
And with fresh, SEC-approved 10Q's and a 10K, I could see a MM submitting a 211 application.
But if the answer is "yes," the issuer has been under SEC investigation in the last 12 months, and a MM submits a 211 application anyway, are there additional repurcussions the MM could face, if problems developed?
Because to be honest, if I was the Market Maker, that would be a very difficult decision for me to make. If my firm could face legal problems that would otherwise not be faced by waiting until October, I would probably choose prudence over profit.
Thank you for sharing your opinion, legal.
Of course, that would mean that the company just issued a false and misleading Press Release, if you are correct. Probably not a good time for M&M to do something like that.
I wonder if they ran that by Greenberg Traurig before releasing it?
As I understand it, the SEC does have FINRA oversight, in that the SEC has to approve actions such as FINRA rule changes, for example.
But FINRA is a Self Regulatory Organization (SRO). And I have previously noted that one of the questions on the 211 application asks the Market Maker if the Issuer was under SEC investigation during the last 12 months.
Why?
Does that mean that the application will be denied if the answer is "yes?" I haven't been able to find anything that stipulates that.
But why else would the question be asked?
So in my own worst case scenario, I am assuming that the 211 application won't be approved until the answer to that question is "no," which would be in October.
If the 211 can be approved before then, GREAT!!
If not, the size of the paycheck will just be that much bigger in October than it would be now, and it would certainly be worth the wait.
Hello, starfire
Yes, I do read insidehedger's postings, and I also read where Doug said that the financials would not be submitted until the Q2 report was finished, which makes perfect sense to me.
So in terms of the silence being broken, as kittyhawk so aptly phrased it, and now seeing "the light up ahead," as you say, I don't disagree that much progress is apparently being made.
The issue, to me, is where are we in terms of getting FINRA to approve a 211, once we conclude the investigation and submit the required filings?
Hello, brainstorming
Agreed that high growth, high revenue-producing enterprises need to have an internal auditor. A business fundamental. However, I was noting the language of the PR as regards Mr. Reilly. "The Company is working diligently to complete its financial reports required to file with the U.S. Securities and Exchange Commission. SpongeTech has retained James Reilly as an internal consultant to assist in these efforts."
I interpreted "consultant" as more of a transient position, than if the company had announced they had hired Mr. Reilly as their Internal Auditor. And the intended purpose of retaining Mr. Reilly stated as being to assist with the completion of the financial reports.
Once the reports are completed, I see nothing to support that Mr. Reilly will continue to be retained, "for the ongoing business and the time after."
That leaves me to speculate as to why a more permanent placement was not announced. And with that door being opened, maybe the answer will prove to be that the new owners have all the financial staff they need.
Yes, kittyhawk, stox would say, "to smile about."
I hope all is well with our friend and his family, and that we will hear from him soon.
In the meanwhile, it is good to see PR's from the company regarding their position versus Madison Square Garden; addressing press inaccuracies; and now, providing what they termed a "progress report." To me, however, this last PR serves as much to refute statements on these message boards, as it does to update us on the company's progress.
As to how soon it will be before we have our last laugh, I'm thinking it may take awhile longer, after reading the PR. Would we have hired Greenberg Traurig to replace Brown Rudnick if we had reached a settlement on the Wells Notice? And would we have hired James Reilly as an internal consultant to liaise with Robison & Hill, if our filings were nearly ready for submission? Perhaps. These changes may be a better fit for the company's future. But it suggests to me that we may yet have more to do to resolve our current situation. And given the fact that we received the Wells Notice on Dec 28th, and hired Greenberg Traurig just two days later, I suspect that M&M were not very satisfied with Brown Rudnick, or at least not with Mr. Siegel. I'm making the assumption, though, that the company was relying on Brown Rudnick for both class action representation, as well as SEC compliance issues, as they now are with Greenberg Traurig.
It's somewhat of a moot point right now, though, at least in terms of PPS. As long as FINRA appears to be uncooperative with restoring our OTCBB listing in a timely manner, once we are in compliance, we will most likely still be undervalued on the grey market, even with the filings submitted, and the Wells Notice settled. Nevertheless, as a shareholder, that is now the outcome I am eagerly awaiting, regardless of the trading venue.
Perhaps, when we hear from stox again, he may have some insight to share with us in this regard.
jay
So, spooky, the PR is nothing but fluff?
Granted, it's not the table pounder that we Longs are awaiting. However, it did provide that, "Vanity Events, Inc. entered into a licensing agreement on August 10, 2009, granting an exclusive and non-transferable, limited license to use the SpongeTech's trademark, America’s Cleaning CompanyTM, in conjunction with Vanity's cleaning business division."
And that seemed to be an issue for you a week or so ago, when you said, "why do you continue to call SPNG 'America's Cleaning Company' when that is now VAEV's slogan?"
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=45972499
The PR also advised us that the, "Company is working diligently to complete its financial reports required to file with the U.S. Securities and Exchange Commission. SpongeTech has retained James Reilly as an internal consultant to assist in these efforts. Robison & Hill remains our public accounting firm."
More fluff? It was you that said, "filing the 10K would do nothing more than incriminate SPNG execs and prove all your crazy short theories wrong. you sure you still want that 10K?"
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=46346764
With Mr. Reilly now joining the effort to assist our auditors with the filings, and Greenberg Traurig hired to handle the SEC investigation, I agree with what you said.
"if the 10k was right around the corner, and the SEC only slaps M&M on the hand i might actually contemplate buying back in at some point."
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=46619600
jay
Oh, good !! I like multiple choice "facts."
overachiever:
"...they can no longer dump unregistered stock on you and others through forgery and fraud."
patchman:
"...SPNG is taking liberties on updating their A/S count and are most likely issuing more stock into the market as we speak."
Now all I have to do is figure out how a cash flow negative, money losing company managed to get their product into Walmart stores across the country.
Wouldn't they still have to file share structure changes with the SOS in the state of incorporation? Have any changes been filed?
I would agree with that valuation for a Q2, FY10 PPS estimate, assuming the O/S is only 30% lower than the 722 million last known count. But that would also be based on using a TTM PE ratio.
But a PEG of 1, and a significantly lower O/S, and PPS could be significantly higher.
It will just be nice to take it for granted that fair value will be consistently maintained, once it is finally achieved.
Actually, I don't feel sorry for them either, Mingy.
And btw, at $16.75 per share, I could retire NOW, so that would be tempting, if I was at the screen when it happened.
But the squeeze prices are there, just in case. If we can reach, and sustain, fair value, I will be a very happy trader.
The $1.50 exit target is fundamentally realistic, going by the guidance we had through Q1 ($1.25 for that quarter). IMO.
The other prices, starting at $4.00 (which is actually the price I need to pay off my mortgage, I made a mistake earlier), are in place just in the event there is a squeeze. A squeeze may be very short-lived, maybe only lasting for minutes. But in that event, I'm there.
A market cap of ($1.50 x 350 million shares) is $525 million. And if we do $300 million is sales in FY10? Too expensive, even given the projected growth rate?
I agree, Mingy.
But I feel sorry for the poor naked shorts. That's why I have 12 offers in place, so they have plenty of opportunity to buy my shares.
Um, did I mention that my highest offer price is $100?
I was actually referring to a post that said that unsubstantiated buyout rumors were being spread in an attempt to keep us from selling.
I appreciate the input, Kitt. My next lowest offer is at $4.00, though.
If PPS does get to $2.75, and I miss it, oh well. Even if I sell everything at $1.50, my mortgage will be paid off.
Good luck.
Reminds me of a post I read from someone who said he used the pet sponge to give his goldfish a bath. They died, but the fish tank sure was clean.
Dear SpongeMeisters,
So, signing licensing agreements with Viacom, Nickelodeon, and Marvel weren't enough? Selling 160 million shares to a single Hedge Fund just had to be done, as well? And to top it all off, you just had to establish a retail footprint with Sears, KMart, and Walmart, too?
Admit it. That's all part of a "pump and dump" strategy, isn't it?
And now, I hear you're introducing your very own nefarious variant to the old "pump and dump." To wit:
"Why are executives, Furth, and Hess touting...rumors of buyouts...? Is the expectation not that they will trade on the news but simply stop them from selling?"
So, a "pump and hold" strategy now, eh? To stop me, and my fellow Longs from selling?
Well, speaking for myself, it isn't going to work. I have long had, and continue to have, 12 open sell orders in place. The lowest offer price is $1.50. If all 12 orders fill, I will be left with a mere 7% of the shares I currently hold. In which case, you will have failed miserably in your futile attempt to prevent me from selling.
Sheeesh...
jay
Hello, spongeboy
I share your thinking that the float is gone, and has been gone for some time.
And keep in mind that Proteonomix has some China-based affiliations as well (China Biopharma and Sinoquest, as I recall). Additional synergies to consider for Pike's involvement.
I think Taikone's appeal to SPNG is somewhat diminished at this point. IMO, they were there at a critical juncture, and I wouldn't be surprised if their affiliated sells for us were largely responsible for our $50 million in sales for FY08.
But it appears that M&M have managed to establish a domestic footprint and business plan that will dwarf the contributions from off-shore affiliates going forward.
The idea of a merger has a lot of appeal. But as for a buyout being a more attractive alternative? We know that M&M are promoters by nature. And you've got to wonder how much incentive they have to operate independently, after the emotional toll this ordeal has taken. So who knows? But I'd like to think that we could remain independent for another year or so, anyway.
Thank you, Letgo
Read Part 3 (b) 2 on the attached.
http://www.otcbb.com/aboutOTCBB/forms/form211.pdf
Hello, stox
Regarding that appeal to the inside with an .03 bid for 300 million shares. The controlled buy-in to close the position?
And?
And noting the trading pattern for the 90 days following the resumption of trading. With a pretty solid floor at the .04 level. And an increase in volume from day 60 - day 90. A pattern reflective of a negotiated close-out of an open naked short position?
And I'm wondering if Pike wasn't likewise given the same 90 days to complete the acquisition of his (49%?) ownership stake.
And since day 90, we've been seeing a decrease in volume, as well as in PPS. Just an observation I found interesting. Something that would also explain the .04 support broken, and why the volume has slowed down.
I see it was suggested to you that an update regarding share structure could cause the share price to, "go through the roof, especially on the gray market." And it was news to me that there was widespread agreement that anything, even an updated O/S count, could cause a spike on this trading venue. Well, if so, great. But news of Pike's accumulation did not cause a spike in PPS. Nor did our seeing our product for sale at Sears and KMart. Neither did news of the Marvel agreement. And as we saw today, neither has the discovery of our product being offered at Walmart. I'm in agreement with your (classic)response to that suggestion. "And you imagine, do yourself and others, that coupled with the continued absence of the numbers picture in full, and the lack of clarity otherwise, that market level would indeed soar?"
In fact, I'm afraid that even the submission of the 10K and the 10Q's would probably suffer a muted response on the gray market. If we do see the filings, fine. Some PPS improvement would be better than none.
But my suspicion is that we may not see the filings, formally, until October. FINRA being an SRO. And the 211 application asking the Market Maker, "Has the issuer...been subject to a trading suspension order issued by the SEC during the past 12 months?"
Whatever THE issue is with FINRA, and whatever the outcome of the SEC investigation, it's good to know that SpongeTech is carrying on with business as usual. Walmart! Wow! Even if it does take 8 months to regain our OTCBB listing, that doesn't mean that at that time, we will be worth any less than we would have otherwise been.
So, holding and waiting as long as it takes.
Take care, my friend, and thank you, as always.
jay
Hi, stox
Your quote of Metter's comments at the Noble Conference, regarding the company now being cash flow positive, has some here wondering why so many payments are still being made by RME. And the veracity of Mr. Metter's comment has been challenged.
As a shareholder, should I be alarmed by this? Do I have to necessarily accept the naysayers' contention that the company is not, in fact, generating positive cash flow? What considerations are relevant in making a determination?
I'm not concerned. My reasons being, in part, based on the following.
> RME has returned hundreds of millions of shares to the company. Those shares retired and returned to the treasury, according to filings.
> For the next month, the company still has the right to repurchase all remaining shares issued to RME over the last 2 years, at the original purchase price of the shares. This also, according to filings.
> And what is generating such a demand for cash by the company? We know the company has a growth target they are trying to achieve. That growth requiring a significant increase in inventory levels for initial orders to new customers. Also demanding additional manufacturing capacity to produce sufficient product to meet projected re-order levels. Is Walmart likely to enter into a purchase agreement if current inventory levels, and the company's ability to maintain order levels, is less than they require?
Add to the list any acquisitions that may present themselves. Include the cash required to keep the new product pipeline financed. And just how many shares, beyond the announced buyback quantity, might the company have purchased?
We are all painfully aware of the precarious situation we find ourselves in with the SEC. Their perspective backwards-looking.
But we are equally aware that Pike, and the others who will join him, are looking to the future. And I see no reason not to share that future with them.
Thank you, stox, as always.
jay
The company ending the year on a low note, unfortunately, announcing the reception of a Wells Notice. And from our previous correspondence, it is apparent that you and I, and doubtless many other investors, began researching the Wells process. And specifically, you and I talking about the time line for a Wells Submission. The company evidently willing to announce the initiation of a Wells Notice, but not willing to elaborate about any possible conclusion to that process. Or even to advise us about the status of the process.
And for myself, an embarrassing development of "tunnel vision." Too focused on a Wells Submission, or the announcement of Wells meetings being initiated, to even consider that Mr. Siegel began unannounced meetings with the SEC to resolve the issues identified as expeditiously as possible.
For stox to suggest that such was the case? Accepting that suggestion as "gospel?" Well, consider me guilty as charged, if you like. But I found his suggestion instantly plausible. Why else would the company have retained Mr. Siegel?
Hello, loanranger
Although I have previously referred to stox as my "respected friend," that is based solely on the appreciation I have of him for his time and consideration in replying to my various comments and questions. There is no other communication between us. So unfortunately, I could not comment on his adherence to various posting guidelines.
And you're being a bit too self-deprecating. It is apparent that you have an excellent grasp of what stox is saying.
In terms of there being an, as yet, unannounced settlement of the Wells Notice, which stox contends exist, I've given the matter some thought. Stox provided that negotiations were in progress while the investigation was in the active phase. I should have realized that. And upon reflection, that seems entirely logical and plausible to me. Mr. Siegel very likely initiating meetings with his former associates or successors at the SEC's NY Dept of Enforcement, where he previously served as Chief Attorney. Or maybe he met directly with the staff in Washington after receiving the Notice. Either way, a more sensible course of action than to delay the meetings.
And my take on FINRA's approval of the 211 is akin to the proverbial question of what came first, the chicken or the egg? Management, understandably, not wanting to release any news regarding settlement, PR's, share structure, earnings, etc., while on the grey market, and without knowing when to expect approval of the 211 application. And of course, FINRA simply declining 211 approval until the filings are Edgarized and the investigation concluded. My opinion being that management has no choice but to submit the filings while on the current trading venue, and the question now revolving on the timing of the 211 approval. And that, in turn, will affect when management decides to issue Press Releases regarding recent events, new customers, plans for future expansion, etc.
Pretty much in-line with what you quoted from stox, right?
hi, loanranger
I also look forward to stox's responses. They typically delve more deeply into the question at hand, and provide more detail than is contained in the initial post. The fact that stox can reply with that level of detail lends to his credibility.
Like you, I had been looking for more information on the Wells Submission process. The link I provided being the most informative I came across. I would doubt that SPNG would file a Submission. While M&M may be the "stand up and fight" variety, I would hope that Martin Siegel would prevail.
But what's unknown at this point is whether or not a Submission deadline has passed, and whether or not Mr. Siegel has begun the Wells Meeting process. I don't see FINRA approving a 211 application while this process is active. I would also doubt that a MM would be willing to even make an application at this point. And until this investigation concludes, I'd be surprised if we go anywhere.
Hi, stox
Yes, a high of $0.2851, WITH an unabated phantom float. But also, with a net profit from the April 10Q of only $4.9 million through three quarters. Talk at that time projecting a $10 million full-year result.
And now? Maybe a 300 million share reduction in the phantom float. Maybe more? And that much again reduced in the legitimate float? And $30 million or so in net, through Q2? Fundamental realities, indeed, being in a different world now, than then.
And "No general offense intended?" So only a narrowly-defined, targeted, specific offense intended? LOL !! None taken, of either type. "Settlement details to be soon formally announced. Inclusive of the performance issues surrounding the MSG goings-on..." My bad for misinterpreting. My bad? (All in fun, stox).
And in regards to the Wells Notice, you, alone, advising as to a settlement being reached. And straightforward in the expected recommendations. It's not that you haven't been clear, or that we don't understand. I think it's more a matter of the hoped-for result leading to "life-changing" results for many of us. At a time when this tough row to hoe has taken its toll on us Faithful Longs.
Thank you, as always, stox.
jay
Excellent post, pennypacker ~~
Thank you for that summary.
Fair enough request, loanranger.
From SpongeTech's 10K of 8-06:
"Since our inception, we have had sales of $342,019, $1,858 and $1,051 for the fiscal years ended May 31, 2003, 2004 and 2005 respectively. For the year ended May 31, 2006, we had sales of $12,859."
"We were formed on June 18, 1999, under the name Romantic Scents, Inc. On June 12, 2001, Romantic Scents, Inc. changed its name to RSI Enterprises, Inc., and, on October 2, 2002, changed its name to Spongetech International Ltd. On July 15, 2002, we entered into a stock purchase agreement with Nexgen Acquisitions VIII, Inc...Thereafter, on October 9, 2002, Nexgen Acquisitions VIII, Inc. changed its name to Spongetech Delivery Systems, Inc."
And 13 quarters later, according to press releases, anyway, we go from $13,000 in annual revenue, to a reported $70 million quarter. All on the back of RME financing.
And how much more potential does Pike Capital bring to the table? Not only in terms of financing, but with an apparent shared vision in terms of certain markets and products?
I appreciate your well-considered questions. I even share, in general terms, your reservations. But we're not talking generalities here. We're talking about M&M specifically, the product and technology in particular, and with the shuffling about as set forth in the referenced filing.
On the topic of Pike's strategic thinking in regards to China and bioengineering, consider that the subsidiaries of American Dairy, in which Pike is a major shareholder, include two Chinese biotech companies.
http://ady.feihe.com/about_us.html
http://www.istockanalyst.com/article/viewsecfiling/articleid/3242857
If the financials are ultimately verified and substantially in-line with expectations, Pike doesn't need any other reason for his investment in SpongeTech.
But, even in my correspondence with my respected friend, stox, I have stated my opinion that there is more to Pike's motivation than what we know. Longer-term, I think it could be related to bioengineering and China. Consider Pike's previous involvement with AOB, and Steve's association with Proteonomix. And note PROT's developing relationship with Sinoquest and China Biopharma. Even the related interests of Parlux and Azurel could be considered in an ancillary footnote.
Whether Pike's interest is strictly in SpongeTech, or beyond, this could get real big, real fast.
You asked us to follow you on your theoretical scenario, in which you held Pike blameless of any wrong-doing. I was with you, until you suggested that Pike's recent purchases were made at the advice of his lawyers. I don't see why his lawyers would have advised him to buy shares. Nor do I see why he would need an alibi, or want to show plausibile deniability. And for you to now say that, "Maybe Pike knew all along," completely changes your scenario.
If Pike had entered into an agreement to buy unregistered shares, he would most likely have purchased those shares at a significant discount, and he would have had a separate agreement detailing his subsequent registration rights.
So let's just assume that he bought unregistered shares at a 40% discount, knowing he had to hold them for six months. What would it have benefitted SPNG to then send him an opinion letter to have the legends lifted? It doesn't make sense.
Of course, buying to cover would have placed Pike's holdings at zero. He has a little more than that now.
Given the scenario you've outlined, I don't know why Pike's lawyers would have advised him to now buy registered securities. If SPNG gave Pike consent for the sell, via an opinion letter, he would not be guilty of any wrong-doing, so what would they be trying to mitigate?
The only way Pike's sells would be called into question, that I can think of, is that if they were made outside the agreement he undoubtedly would have had regarding his registration rights.
Hello, time
I am Long, and I simply enjoy communicating and exchanging ideas with stox.