Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
"Which part do you not understand that the statement "Dicon has created 60 jobs" is a fact and not an opinion or misunderstanding?"
The Dicon has created 60 jobs part.
I'm having trouble keeping my Cheerios down as I type this, but I choose to believe the Spongetech attorney, who would gladly embrace and provide your statement to the court if he didn't think he'd get busted for it, rather than accept as true a total stranger's reference to "one of the US government state departments" which he/she chooses not to name or link for verification.
Actually the report states:
"Spongetech and Dicon together employ 23 individuals. In addition, 57 sales representatives work for the company on commission."
You're absolutely right.
The question is:
1. Are those representatives individuals who are treated as such on the books of the company, reporting to company management, performing their function in a manner that management dictates and who the company requires to submit a current Form W-4? If so, they're employees and belong in any census or statement reporting employees.
2. Or are they representatives in the employ of others that offer Spongetech's and other company's products for sale, not meeting the definition of common law employees of Spongetech.
We would have to know what was in the writers head, perish the thought, when they made the statement to be sure, but I'm inclined to think that it was the latter. It's a rare manufacturer that employs better than 70% of their own personnel in field sales, whether they be commissioned or salaried. I'm inclined to suggest that that is common sense, but that may have no place here.
IRS publication 15-A covers the subject in gory detail, but I doubt that it was consulted for its definitions prior to making the statement. I do know that the statement that "That works out to a total of 80 employees and "sales representatives" working for the company" is far less descriptive than "Spongetech and Dicon together employ 23 individuals. In addition, 57 sales representatives work for the company*** on commission". If you really want to play "Parse the Statement", the company's statement implies that Spongetech and Dicon do not employ the sales representatives by stating unequivocally that they "together employ 23 individuals." Period, end of sentence.
***The original text is "Companies".
By the way, you seem to be a party to some confusion regarding the actual completeness and composition of the $7.7million net sales reported in your linked document and other documents supplied by the Defendant Spongetech. Since it appears in the paragraph directly following the quote that is provided above, maybe we can clear it up right now by providing the pertinent passages:
"Dicon's net sales totaled approximately $6.3 million, and Spongetech's net sales totaled $1.3 million for the period June 1, 2009 through April 30, 2010."
"Thus the Companies' total net sales for the past eleven months is approximately $7.7 million."
The document is signed by Jesse Z. Weiss, attorney for Spongetech, who at that moment in time and space had every opportunity, and plenty of incentive, to suggest or hint at the possibility that there may have been shipments made by subsidiaries or other entities to other countries or planets that are not reflected in the "total net sales" that he was reporting. He didn't.
Nothing speaks to the issue more clearly than that and for anyone to suggest that the reported total net sales might not really be the total net sales is plainly nonsense. Please pass it on.
Risi,
Of course I don't mind, but I should point out that you are amending my own amendment. My original post said:
"Using as support a link to a financial statement showing data that is 16 months old (a/o 2/28/09).........a financial statement inclusive of and preceded by approximately 2 years of financial statements that the SEC demands MUST be restated.......wouldn't seem exactly kosher."
Hoggey judged me to be "a little overzealous", so I gave him the Fisher Price version on the second pass. My original and your amendment are more complete and accordingly more accurate.
Now you're a little overzealous, too.
:o)
You're a hard man to bring down. The Larry Czonka of message boards :o)
OT,
As usual, I should have been clearer. But from your response to flptrn I still think maybe you don't "got it".
The attorney presenting the motion, in this case the SEC, has provided what they want to see happen in the form of a (Proposed) Order so the judge just has to sign it and doesn't have to create the order himself.
All that's missing....check your link.....is the judge's signature.
"Actually, Dicon has 60 employees, most of the employees are in Dicon not SPNG. Although, Dicon never had that many until it was purchased by SPNG. I have provided material proof on this information here before, there is no question about my statement."
leucro,
Weiss, the attorney for Metter, in his response to the motion for a preliminary injunction and asset freeze, said "Spongetech and Dicon together employ 23 individuals."
Why do you suppose he would deceive the court by understating the number of employees like that?
OT,
I wouldn't dare disagree with the gist of your post.....I almost never do :o)
But this isn't true (yet, as of a couple hours ago, and I don't want to throw another $.16 at it).
"The court has approved a receiver for SPNG."
"you seem a little overzealous to win this ongoing debate on spng. As a result, you have grossly overstated and mischaracterized my comments."
Zealous perhaps, but for the honest portrayal of the facts......I don't expect to win anything here. I expect no one will. I felt that certain elements of your post deserved comment and quoted your words in each instance.
You said that there are no creditors:
"Therefore, there are no debentures or creditors, secured or otherwise."
You said that there is no long term debt, linking a 2/28/09 balance sheet as your source:
"LT Debt = ZERO, aka $0.00
http://www.google.com/finance?q=OTC:SPNG&fstype=ii"
You cited the USXP case, saying:
"Considering UXSP won a multi HUNDRED million judgment from naked short sellers, it's very possible SPNG too can win their own judgment"
My post is no more overzealous than yours is inappropriate. As long as your post is on topic and my response is to the content of your post, I think we'll be just fine here. You may feel that I "mischaracterized" your comments.....I suspect some might disagree. It wasn't my purpose.....I had the intent of characterizing your comments precisely.....hence the quotation marks.
My only points were:
1. Spongetech has creditors.
2. Reliance on a 16 month old balance sheet for current information is unwise.
3. SPNG shareholders should not want to share the good fortune of USXP shareholders.
Hardly seems overzealous.
hoggey,
"To my knowledge SPNG has no LT debt."
You are not alone in not knowing.
"Therefore, there are no debentures or creditors, secured or otherwise." ???
There probably aren't any debentures, but no creditors? Using as support a link to a financial statement showing data that is 16 months old (a/o 2/28/09).........a financial statement inclusive of and preceded by approximately 2 years of financial statements that the SEC demands MUST be restated.......wouldn't seem exactly kosher.
What a CURRENT financial statement would show in the Liabilities section, apart from defense costs, we have absolutely no idea.......we have never seen a financial statement from Dicon, the workhorse of the operation and presumably the entity which would incur liabilities for raw materials. But the following list, compiled by Overachiever, is a good representation of some of the non-trade items that would, at the very least, appear in the Legal Proceedings section of a current report filing (10Q or K). And I hope that you would accept the possibility that some or all of these parties have been and will be entitled to the term "creditors". Do we know how many more of these "creditors" there might be? That's right.....no, we don't.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=50494614:
"SPNG is involved in many more lawsuits for unpaid bills that have the potential of sending this scam into Involuntary Bankruptcy.
Getting sued by CBS Radio for unpaid advertising bills
Getting sued by the NFL's New York Giants for unpaid advertising and food bills.
They are getting sued by the Major League Baseball's NY Mets for hot checks and unpaid bills
Getting sued by Madison Square Garden (New York Knicks and New York Rangers) for hot checks and unpaid bills.
Getting sued by the NHL's NY Islanders for hot checks and unpaid bills.
Getting sued by the NFL's Chicago Bears for unpaid bills. The Bears filed a Confession of Judgment against Spongetech on April 22 for two hundred thousand dollars.
Getting sued for unpaid royalties by the Florida company which produced their television commercials.
SPNG is also in a lawsuit with Cresta Capital over not allowing CRESTA to exercise the stock warrants Cresta received as part of investment banking fee."
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
"Also, consider that USXP actually won multimillion dollar judgments against naked short sellers, from juries, in state courts. Actually USXP won $700 million in judgments as noted by USXP receiver, Jane Moskowitz."
Here's the only piece of your USXP argument that has/had any bottom line meaning for their.......and if you think you can make the impossibly long stretch.....Spongetech's shareholders. Note that this conclusion was drawn in 2007 regarding judgments "won" in 2001 and 2003:
"The Receiver has sought to evaluate the collectability of these judgments. While the judgments are valid, and collection efforts ongoing, the company's characterization of them as substantially collectable does not appear to be correct."
If you really feel that the situations are analogous, please tell us how the USXP shareholders have fared. What did their shares fetch in any settlement(s)?
Spongetech is headquartered on 33rd St. in Manhattan, far from Piccadilly Circus where you're more likely to find these guys operating:
"Chartered Accountancy bodies, the Law Societies, the Insolvency Practitioners' Association or the Department of Trade."
I'm not sure how much of your paragraph applies on 33rd St.
Say goodnight, Gracie.
"The 66 Million was part of a share issuance that took place AFTER Metter supposedly resigned."
I'm not sure how you drew that conclusion?
BUT:
Resignation letter dated 9/5/07
http://viewer.zoho.com/docs/lecmc
From the 10K for y/e 5/31/08, filed and signed by SM and MM on 8/29/08:
"Mr. Metter has served as President of RM Enterprises International, Inc., our majority stockholder, since April, 2001, and as its Chief Executive Officer since March 2, 2004."
"The control persons of RM Enterprises International are Michael Metter, Steven Moskowitz and Frank Lazauskas, all of whom are directors of RM Enterprises International."
On a different issue, from Metter's opposition to motion for PI/Asset Freeze, submitted by attorney Weiss:
"The SEC does not allege, and the evidence at a hearing will show, that Mr. Metter was not involved in the day-to-day business operations of Spongetech and did not earn a salary from Spongetech."
From his employment agreement:
"ARTICLE 5
OTHER EMPLOYMENT
Except as may otherwise be provided for herein, during the Term of this Agreement, Employee shall devote substantially all of his business and professional time and effort, attention, knowledge, and skill to the management, supervision and direction of Employer’s business and affairs as Employee’s highest professional priority."
"Salary
4.1 Employer shall issue to Employee an aggregate of Four Million (4,000,000) shares of the Employer’s Class B Stock, payable upon execution of this Agreement."
From the aforementioned 10K:
"Our officers and directors are involved in other businesses which may cause them to devote less time to our business."
"Mr. Metter devotes approximately 20 hours each week, constituting 30% of his time, to our business."
"Can someone show me the document where the SEC clearly outlines the 3B shares?"
I can't show you a document because of my shortage of technical skills, but I can tell you that Exhibit P (Document 7-17) of the Exhibit List for the Davis Declaration(Document 7) is something entitled:
Registrar Control
Worldwide Stock Transfer, LLC
Effective: 03/24/10
I don't pretend to understand it, but it shows:
Beginning balance: 1,966,216,606
Shares Issued: 1,033,368,744
Ending Balance: 2,999,984,950
Certificate details are provided for the Shares Issued amount.
I had hoped to provide you with enough detail to satisfy this issue, but I see that there are a number of additional Worldwide Transfer and Olde Monmouth items on that Exhibit List that presumably relate to this issue and it would be too time consuming for me to re-type the pertinent parts (simple copy and paste won't work for me). The link is to scions list of those items and I suspect that a Pacer subscription will reveal more than you ever wanted to know about the subject.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=50321061
There seems to be little doubt that the SEC has documented their finding thoroughly.
"what is wrong with this picture?"
Which part?
The 66million RME holding or the Class B holding, neither of which were mentioned?
certain sales.......and you stopped reading at that point for some reason?
certain sales documentation.
"A&M performed a review of certain sales
documentation for the period June 2009 to April 2010......"
They reported on ALL the sales for which documentation was provided. It was in the company's interest to provide every piece of sales documentation for the period that they could scrape together. What purpose would it serve for the company, knowing that the function of the report was to support their position in court, to leave any documentation out?
This is a specious argument.
"Am I wrong? "
Yes.
lug,
I know nothing about question 2.
As far as the investment in Dicon is concerned, I'd like to know if they were profitable.
IF they were, in this day and age the opportunity to buy a profitable manufacturer at a price/sales ratio of less than 1 is an investment that I personally would give some careful consideration. If they were the primary supplier to my company, all the better. Unless there are some secrets that we don't know about regarding their financial condition....we never saw their financials.....Dicon is probably the most valuable asset that Spongetech owns. And possibly their most intelligent use of capital ever.
Excerpts from an analysis of revenues, performed by a firm hired by SPNG (apologies for my inability to provide a link):
I, Laureen M. Ryan, pursuant to 28 U.S.C. § 1746, declare as follows:
1. I am a Managing Director with Alvarez & Marsal, Dispute Analysis & Forensic
Services LLC (“A&M”). At the request of counsel, A&M performed a review of certain sales
documentation for the period June 2009 to April 2010 for Spongetech Delivery Systems, Inc.
(“Spongetech”) and for the period July 2009 (subsequent to acquisition by Spongetech) to April
2010 for Dicon Technologies LLC (“Dicon,” and together with Spongetech, the “Companies”).
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
4. Dicon provided a schedule of sales by customer for the period July 9, 2009
through April 30, 2010 which reflects that its net sales totaled approximately $6.3 million.
Attached hereto as Exhibit 1 is a summary of Dicon sales by customer for the period July 9, 2009
through April 30, 2010. For the period June 1, 2009 through April 30, 2010, Spongetech
provided a schedule of sales by customer which reflects that Spongetech’s net sales totaled
approximately $1.3 million. Attached hereto as Exhibit 2 is a summary of Spongetech sales by
customer for the period June 1, 2009 through April 30, 2010. Accordingly, the Companies’ total
net sales for the period June 1, 2009 through April 30, 2010 (the “Current Period”) reflected on
these schedules is approximately $7.7 million.
The above was submitted "in support of Defendant Spongetech’s Opposition to
Plaintiff’s Motion for Preliminary Injunction, Asset Freeze, and Other Relief" and posted to Pacer last night.
For the record, Nasdaq.com shows the following, indicating that it was posted there on 9/1/09:
"SpongeTech(R) Delivery Systems, Inc. Reports Record Booked Orders of $70 Million during the First Quarter of FY '10" (Edit note:equals June thru Aug '09)
http://www.nasdaq.com/aspx/company-news-story.aspx?storyid=200909011130bizwire_uspr_____bw6137&title=spongetechr-delivery-systems-inc-reports-record-booked-orders-of-70-million-during-the-first-quarter-of-fy-10
Reading the above PR will show exactly how the company (and its officers) got to where it is today.
It is interesting.....but I don't think so.
No connection resulted from a reasonably thorough search......including a review of a specific tragic event over the winter, which revealed no mention of a Kimberly.
As you probably know, the question has been posed to the poster believed to be L. Patrick Davis, but to my knowledge has not been answered.
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_S/threadview?m=mm&bn=100008&tid=201457&mid=201457&tof=-1&rt=1&frt=2&off=1
I think it's just a case of Davis not being too far behind Smith and Jones on the most popular name list.
K. Davis is a member of the Texas Bar. The local attorneys for Metter and SPNG in the SEC case have asked the court to allow her to represent them in the case and the court has granted their request.
Please donate $.24 to the North Shore Animal League on my behalf :o)
"thats the document of the 14th of may..."
You are correct, sir!
And that was precisely my point. The SEC copied Bachner in on the Freeze motion on 5/14, but Bachner didn't tell the court that he was Moskowitz's attorney until today.
Hence.....better late than never.
"06/16/2010 37 NOTICE of Appearance by Michael F. Bachner on behalf of Steven Moskowitz (aty to be noticed) (Bachner, Michael) (Entered: 06/16/2010)"
Better late than never.
http://viewer.zoho.com/docs/nxPbad
"Brafman is now the THIRD criminal lawyer for Moskowitz (NONE of these was Greenberg, Taurig - all three were reknowned CRIMINAL attorneys). His first was Mark Baker for the arraignment and bail hearing, then it was Michael Bachner, and now it's Ben Brafman."
I don't see any changes. Baker is with Brafman & Associates, providing representation in the criminal case and signer of the recent motion. Bachner appears to be his attorney in the SEC case.
Am I missing something?
"Thyere is no disgorgement of COMPENSATION, only of illegal TRADING gains."
Section 304 -- Forfeiture of Certain Bonuses and Profits
1. Additional Compensation Prior to Noncompliance With Commission Financial Reporting Requirements. If an issuer is required to prepare an accounting restatement due to the material noncompliance of the issuer, as a result of misconduct, with any financial reporting requirement under the securities laws, the chief executive officer and chief financial officer of the issuer shall reimburse the issuer for--
1. any bonus or other incentive-based or equity-based compensation received by that person from the issuer during the 12-month period following the first public issuance or filing with the Commission (whichever first occurs) of the financial document embodying such financial reporting requirement; and
2. any profits realized from the sale of securities of the issuer during that 12-month period.
Unless my reading skills have diminished.....and everything else has, so why not......the phrases in bold, taken directly from the law, would seem to be at odds with your understanding.
I'm still willing to listen, but the above seems self-explanatory to me. How am I mistaken? The law does not require that the "equity based compensation" be "SOLD into the market", nor does either the law or I address the legality of the issuance. Could you be saying that the Class B shares don't represent "equity based compensation"? Otherwise, you've lost me.
While the law seems to have the intent of taking back "additional" compensation and not regular salaries, it seems to me that its inclusion of "equity based compensation" covers a situation just like this one and may, in fact, have been designed to ensure that such devices were not employed to avoid it.
Here's a link to the 10Q covering the period in which the initial Class B shares were issued. If you can find where there was a compensation expense reflected that would provide guidance re: a Class B pps or any other reference that suggests a value for a Class B share, please point it out.
I fail to understand why you feel that the shares which, at your prompting, I have established were compensation, would not be disgorged back to the corporation under Sarbox 304. Please help me understand what I am missing.
http://sec.gov/Archives/edgar/data/1201251/000114420408057701/v128905.htm#i2
"One thing is very UNLIKELY, and that would be for the court to order extinguishment of Class B without paying Class B shareholders full purchase price (or fare value)"
There was no "purchase price"......at least for the 10million shares that we know about, which were paid out as compensation, which requires disgorgement to the issuer by Sarbox. Does that change your opinion at all?
If it doesn't, how would you propose that fair value be calculated or a buyer be found who would actually make the investment?
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=50322453
big,
As others have pointed out and as was made clear to me when I posted on this subject a few months ago, the control issue is pretty much just academic given the financial issues. Follow this thread for a couple posts:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=49961699
scion,
Based on 1)the second Motion to Extend, 2)the letter requesting clarification of the courts response to it, referencing "these Defendants'" and 3)the courts grant of the second extension without qualification, wouldn't it appear that that request was made solely on the behalf of Spongetech and Metter and that the other defendants response was due on 6/11?
Wouldn't you expect them to have been Pacerized by now if they were filed on time?
TIA
lug,
Maybe these will help:
http://www.law.uc.edu/CCL/SOact/sec304.html
in conjunction with Section 107 on page 31 of this:
http://www.sec.gov/litigation/complaints/2010/comp21515.pdf
and this:
http://www.sec.gov/Archives/edgar/data/1201251/000114420408042150/v121013_8k.htm
As I understand it, "they can also force that corporate officer or any other corporate officer to give up their class B shares" based on the above.
1. They were given the first batch of Class B shares as compensation.
2. SOX says basically that the CEO and CFO must "reimburse the issuer" for any compensation received during the 12 months following the filing of reports that must be restated for noncompliance due to "misconduct".
3. The complaint shows that the company is being required to restate the reports covering the pertinent periods.
"Interesting that his attorneys had requested delays and then came in ahead of schedule."
Wrong. He was granted a delay until Friday and he filed his response on Friday. Sorry.
It will be interesting to see if Speranza's answer to the original complaint was filed Friday, when it was due. And interesting to see if any of the parties that were scheduled to answer the freeze/PI motion, who theoretically weren't granted second extensions, filed on Friday. Pacer should be busy.
I still am unable to find evidence that Pensley was served with the original complaint.
"But the fact that the FBI is in negotiations with Metter tells me something."
OT,
The above tells me that there are too many 3 letter acronyms for an (A)lien (L)ife (F)orm fan to keep track of here. It's the SEC that Metter's lawyer is referring to as negotiating.....this is not a hostage negotiation :o)
Different subject:
The idea that M&M would get involved with the company again 1)if it went private and 2)they were "available" seems pretty funny to me. I think their interest in soapy sponges is a thing of the distant past, if they ever really had one. No shares=No point.
Short attention span, short term memory loss.....I have it all.
Do people with short attention spans really play chess?
Ok, I've watched this sitcom long enough.
jeff: "Does anyone know the total amount of $ that M&M made selling stock?"
pup: "what does it matter - thats what MM do .. they get paid by the trade"
jeff: "Just because it doesn't matter to you doesn't mean it doesn't matter. I asked a reasonable, simple question ... try for a change to answer it reasonably."
MLM: "exactly, MMs are like bookies, they could care less what PPS does, as long as the "vig" (commission) is paid...."
Am I wrong in thinking that jeff is asking about Metter and Moskowitz and you guys are answering about market makers?
If I am, cut me some slack......I'm old.
Which brings up something else. MLM, any chance you can
slow that thing down to a pace that a senior can follow?
I miss Alf!
Very good.
I suspect Mr. Bomart may have actually gone the way of Lucky the Cat who, while delectable, was also known for not having been seen.
""more innocent" than Pensley for not accepting shares,"
K,
On a per letter basis he definitely got stiffed relative to JP.
If one believes that he wasn't "duped" and knew exactly what he was doing in signing letters expressing his opinion that shares could be traded freely that really couldn't, he at some point had to make the conscious decision that he could justify taking the risk of being in exactly the position that he is in now in return for his "ordinary fee".
still seem like pretty good work if ya can get it?
:o)
"Anyone with a different take?"
The more I read about it, the more he seems like a getaway driver that offers the explanation that he just thought that they needed a lift.
He says "I either resigned or was asked to resign from Boards of Directors", yet the directorships claimed on his resume either ended well before he came to Spongetech....in most cases years.....or, in the one recent case, ending as a result of an acquisition. I know it isn't really relevant to the facts, but it just leaves me wondering about the rest of his "the Devils made me do it" protestations. He has been doing this stuff for 38 years, obviously bright and well-educated, if the rest of his resume is to be believed......what are the chances that he was oblivious to the motives of the powers-that-be?
And his pronouncement that he really didn't commit a series of "mistakes" but rather just made the same one mistake a bunch of times isn't quite a sound legal argument :o)
All that said, he was probably strategically smart to jump to the head of the line in responding. Interesting that his attorneys had requested delays and then came in ahead of schedule.
"But there's no question he should not be able to practice in this area"
Unfortunately that area appears to be within his primary universe of expertise. He obviously didn't do the due diligence that I would have expected would be done to render a proper professional opinion.
His defense appears to be based on his expectation that he could rely on documents supplied by the main players and that he was "duped". It would have been helpful to him to have provided exhibits that supported that argument.
He contends that he was typically supplied with "proof" that the shares were issued over a year prior to his opinion in the form of a loan agreement, which is used to justify his request to the t/a to remove the restrictive legend. He supplies an example of such an agreement, involving 18,000,000 shares and made with RME, as Exhibit B***.
His point may have been clearly made if the example of one of his opinion letters, that he provided as Exhibit C, involved RME's sale of those 18,000,000 shares. Instead, without any explanation making a connection that I saw, he provides an example of an opinion letter dated 6/29/09 seeking the lifting of the restriction on 22,150,000 shares (cert#03895) to be transferred from AIT Capital to Double U Trading (see p.6 of the Risk Assessment!). Cert#3895 appears on the infamous list, whatever we're calling it, as having been issued to AIT on 6/25/2009 showing 21,500,000 shares. I would think that that information, assuming that it's accurate, would have been available to him. It certainly would have been known to Worldwide….again, if true…..and Halperin makes a point of noting that they never made him aware that any of the shares he was rendering an opinion on were out for less than a year (not to mention less than a week). But I'm pretty sure that that's not their job.
He was paid to sign some letters and he did. That said, the nature of his intent is probably best decided at trial and not assumed for the purpose of a preliminary injunction. Just my opinion.
***The professional construction of Exhibit B can only be the handiwork of one man. Be sure to have a look.
Mike,
Are you sure of that?
I didn't compare the codes themselves---old eyes. But there are 2 horizontal striations on the upper right side of both bar codes that seem like they might be very consistent.
"At least that is the way the SEC interprets the situation."
Absolutely. They see it just the way you did.
I'll bet we haven't heard the last of this, though. I expect that it will be addressed in the requested clarification.