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K,
As of last April there were no preferred shares issued and there have been no filings reflecting any issuances since then.
"See "begining cash", thats from the 2007 Balance Sheet. And thats just ONE example of how the 2007 Balance Sheet plays a part in the 2009 10K."
You neglect to mention that the beginning cash, which would in fact appear on the 2009 cash flow statement as "5/31/07", it's the same as the beginning balance as of 6/1/07 and doesn't require an audit of 2007 to establish.
As to the rest of it, I'll stand by it:
"Facts:
1. The company has been required to re-audit the year ended 5/31/08.
2. There is no requirement at this point to file a new set of statements for 2008.
3. No financial statements for 2008 will be filed unless the re-audit results in a need to adjust and restate the 2008 audited results. Hence, there would be no need to re-audit the y/e 5/31/07 financial statements."
2007?
I guess that bit of eloquence is in response to:
"Which future filings will require the inclusion of y/e 2007 or prior financial statements?"
Facts:
1. The company has been required to re-audit the year ended 5/31/08.
2. There is no requirement at this point to file a new set of statements for 2008.
3. No financial statements for 2008 will be filed unless the re-audit results in a need to adjust and restate the 2008 audited results. Hence, there would be no need to re-audit the y/e 5/31/07 financial statements.
Cher, er I mean Kaja, was clearly not accurate when she wrote "But on Friday, SpongeTech received a letter from the SEC ordering it to redo its financial statements for the last two years, including the one that just ended." For starters, "Redo" doesn't appear in any of the accounting literature, whether she intended it to mean restate or re-audit. And as far as "the one that just ended" is concerned, it doesn't need redoing...it needs doing. It's just my opinion, but it sounds more sloppy than libelous.
Finally, I'm not naive enough to think that a re-audit, should one ever surface, of 2008 wouldn't require some adjustments and a subsequent restatement. But as of this moment that is not the case.
“the Company would be required to have its financial statements re-audited by a PCAOB-registered firm for any year previously audited by Drakeford in order for the Company to include such financial statements in its future filings with the SEC”
The rest of the sentence doesn't count?
“the Company would be required to have its financial statements re-audited by a PCAOB-registered firm for any year previously audited by Drakeford in order for the Company to include such financial statements in its future filings with the SEC”
Which future filings will require the inclusion of y/e 2007 or prior financial statements?
The only thing that I'm reasonably certain about regarding Tuesday's volume is that it WASN'T Pike. His filing would've been due yesterday and he's been solid on his timing in the past.
My answers to the other 2 are I don't know and no.
FWIW, I've never been very comfortable with the spngdd.com restricted shares/file by 4/30 theory.
The court ordered that Jean Lazauskas's shares (transferred to her by FL virtually moments after the announcement of the original 5M+ judgment) be sold first, back when the balance due was $1.1M. If that was done it would have required a Form 4 filing by FL as beneficial owner......no filing.
Flash forward to 1/29. The balance due is down to $450,000 (10,000,000 shares at recent pps.). Still no filings. The volumes in the shares since 1/29 could have easily absorbed the sale of 10,000,000 shares without anyone noticing.
Flash forward to today. Still no filings.
On the restriction issue.
Excerpted from the SEC website:
"If the company that issued the securities is subject to the reporting requirements of the Securities Exchange Act of 1934, then you must hold the securities for at least six months." SPNG is subject.....etc.
"There must be adequate current information about the issuer of the securities before the sale can be made. This generally means that the issuer has complied with the periodic reporting requirements of the Exchange Act." Obiously, SPNG hasn't.
IF Rule 144 applies to the shares in question:
1. We should note that all the shares filed on the Form 3's of FL and MM back in October have been held more than 6 months, assuming they are still held. The holding period has been satisfied (and had been by 3/29 at the latest).
2. Any shares that may have been acquired since that time have been held less than 6 months and can't be sold.
3. The fact that the company isn't current in their filings precludes the sale of ANY shares. This would have been true since 12/4/09, the date on which the $1.1 million liability was confirmed.
So, if Rule 144 applies, none of the $650,000 that has been paid could have properly come from the sale of any SPNG shares, including the JL shares which the court demanded be sold FIRST.
I wish I knew more about Rule 144 and no, I can't keep this straight. Not for lack of trying.
ps. After posting the above I noticed your exchange with flpt. He's asking a pretty damn good question. Care to respond directly?
"Next week, is the last opportunity for them to dump enough SPNG securities to raise the $1M+ they are short on the BC Media lawsuit."
Hey Virtual,
I've been trying to correct the above amount, which was put forth multiple times, even within the last couple hours. I'll give it one more shot, just for you:
All but $450,000 was paid as of 1/29/10 (which was already an extension date) according to the defendants, who filed a motion on that date requesting an extension of time to 4/30 to pay the $450,000. The court neither agreed or ordered the extension to 4/30.
So the amount is wrong and the timing is wrong.......other than that, it's perfect :o)
Obviously EVERYONE is right about this.
A corporation cannot represent itself
AND
Spongetech is currently their own attorney of record.
This status can hold true until the next appearance or filing. As long as the company doesn't take any ACTION to represent itself there appears to be no rule precluding their pro se LISTING. In this case the term "pro se" is being used in lieu of "none".
That's my story and I'm stickin' to it.
You won't be betting with me.
It is tough to link, but Steve....you need to look at the 2 websites that cover the case and look at the page or menu item that names the attorneys. He definitely WAS the attorney of record at 3/12, but SPNG is now representing itself.
As to why.....my guess is they decided that the MSG case was a lost cause and they needed him to file the current case paperwork.
It looks like the 18,306,473 shares traded Tuesday didn't include any Pike trading. He has a history of filing on a timely basis and a Form 4 for Tuesday would have been required by 5:30PM Eastern today.
OT,
Thanks for the extra step on the DD. You saved me a post.
They need to litigate.....they can't act unilaterally.....and it takes more than a heart beat.
Even then, the commissions requested actions regarding trading are limited to 3......10 day suspension, 12 month suspension or revocation. There is no "stop trading until we get this figured out" option.
Good job.
"an injunction to stop trading indefinately until they are certain of a fair marketplace"
And therein lies the gaping hole in your argument. That is NOT due process as the relevant law defines it.
If you think it is, then please provide ONE(1) example of that having happened. Just one.
"When they filed with the DE SOS to do a RS, that would have wiped all shareholders out."
How?
"Thank the SEC for stopping it"
They did?
Still with the powdered orange drink?
Yes really.
Performance of a service, especially advertising, is every bit as provable as delivery of a material. The fact that the benefit may be more difficult to establish has absolutely no bearing on the legal obligation to pay for a service.
Next time you run into a financial statement take a look at the liability section and see if they divvy it up between services and merchandise.
"there is a difference between a non-tangable contract dispute and a payment for actual supplies"
Is a non-tangable contract dispute one which does not involve powdered orange drinks?
Seriously, what is a non-tangible contract dispute? A contract for services performed is no less enforceable than a contract for materials provided. Please stop making this argument.
hg: "we were talking about MM and FL as individuals, whom, according to you, need to write a million dollar check by the end of the month"
oa: "No. Not according to me. According to a US Federal Court. Read the filings."
1/29 court filing: "The liquidation has proceeded in accordance with the Consent Order. As of the date of this Motion, the actual liquidation proceeds paid or to be paid to the Plaintiffs are approximately $650,000.00."
What exactly does this mean?
"SpongeTech® Delivery Systems, Inc., The Smarter Sponge™, (Pink Sheets:SPNG.PK.pk - News), announces the licensing of their trademark, The Smarter Sponge™, to Rockstar Holdings, Inc. to be utilized to help sell SpongeTech products in malls in North America."
I know squat about licensing.
I know that SPNG pays Viacom royalties based on sales for the privilege of using Spongebob's caricature on their sponges. There's a clear benefit to SPNG that justifies that.
What is the benefit to Rockstar that would justify their payment for the use of the Smarter Sponge trademark? Is the concept that Rockstar benefits financially in an arrangement whereby they develop kiosk's, collecting fees from the operators who act essentially like franchisee's?
And I know it's been mentioned before, but can a company really license a trademark that it doesn't have authorization to use itself?
You're most welcome, mlf.
I know that you didn't ask for it, but if you click on the Short Interest tab here you might find some info that is a whole lot easier to understand and as a result, a bit more helpful.
http://www.otcmarkets.com/pink/quote/quote.jsp?symbol=spng
Good Luck.
http://regsho.finra.org/regsho-Index.html
Good luck with that.
CYRX,
Your math seems reasonable....in the absence of numbers to attach to shelf appearances and normalized operating expenses I'd prefer that to "conservative". And once upon a time that kind of valuation in a start-up might have been attractive to me as an investor. But I'm older now and my risk orientation is different. And it's very difficult for me to ignore the huge stack of crap that those reasonable numbers have to clear to attain that valuation. And the guy that dropped the bomb just added measurably to that stack.
Anyway, my question has nothing to do with my personal risk orientation and I'm sure that there are a number of SPNG holders to whom your reasoning applies.
GL
RM,
Always welcome.
Part of the point of my post was to question, if there are indeed 3,000,000,000 shares out, how many of them might belong to the group that you describe. And maybe to surreptitiously express my opinion that that number is too big to be primarily relatively unsophisticated retail holders.
"Looks like investors are beating down the doors to purchase more of this POS."
When you expressed that bit of sarcasm at 10:18 this morning the volume, on delay, was 49,000 shares. Hordes of people were obviously not seeing the value in the opening price "of this POS"…….but holders clearly weren't trampling each other trying to get out through the fire exit either.
Now, an hour before the close, we see 2,000,000+ shares traded and a 7% ballpark drop in pps. I think that it's fair to say that that doesn't represent panic selling and it sure wouldn't signal capitulation.
Over the weekend you presented evidence that might support that, whatever a shareholders view of the value of a SPNG share was at Fridays close, it was going to be only a quarter of that at Monday's open.
Personally I would not let a trading day pass without selling the shares of a company that has suffered that kind of devaluation. Why do you suppose there has not been a stronger reaction?
Who are the holders of these 3,000,000,000 shares who have chosen to retain 2,997,000,000+ of them after being advised that they might be worth 75% less than they thought? Do they accept your revelation as having already been built into the price? Are they not willing to accept less than .04 for their shares? Are there no buyers at lower prices that are able to entice the sale of these shares? Are you saying that there are no buyers at ANY price?
2,997,000,000 shares untraded. How would you, given your "novice understanding of the markets", explain that?
ud,
I was just a little surprised to see that patchman didn't seem to be aware of it:
"Furth claims to still hold his 42 Million but technically he does not have to file because that is not even required for the 700 Million."
That was the reason for my post.
"This was gone over many times last summer"
Before my time. I'm happy with my understanding of the rule. If he has sold to a position of less than 5% of 722m he was required to file a 13G/A when he reached that point. If the "many times" did not reach that conclusion then I believe they should have gone over it another time.
"Furth claims to still hold his 42 Million but technically he does not have to file because that is not even required for the 700 Million."
Not so.
If the Signature Fund sold shares so that they held less than 5% they would be required to file a 13 G/A in accordance with:
"Item 5.
Ownership of 5 Percent or Less of a Class. If this statement is being filed to report the fact that as of the date hereof the reporting person has ceased to be the beneficial owner of more than 5 percent of the class of securities, check the following [ ].
http://www.law.uc.edu/CCL/34ActRls/rule13d-102.html
"I have PACER and this case does not come up there under Spongetech Del. Systems and All Courts".
"All Courts" is just a selection feature in the Pacer system. It means all courts that Pacer covers...U.S. Appellate, District, and Bankruptcy courts.....not all courts under the sun.
http://pacer.psc.uscourts.gov/psco/cgi-bin/links.pl
"whose responsibility
is it for notifying spongetech's
mgmt of drakeford's issues with
another co. entirely?"
No one's. But that's not the proper question.
The proper question is "Whose responsibility was it to notify Spongetech's management of the revocation of Drakeford's license?"
And there are 3 parties who each clearly had that very responsibility.
1. The licensing body.
The PCAOB issued a public notice on 6/16/09.
2. Drakeford.
At the time of revocation, Drakeford was the certifying public accountant for the company and should already have initiated the process of auditing the company's financial statements for the year ended 5/31/09.
3. Frank Lazauskas.
As the sole member and chairman of the company's audit committee he had the responsibility to act as liaison with Drakeford on behalf of management and stay apprised of any actions of the PCAOB that might affect the company.
Anecdotal information is available to support that the Drakeford revocation was not a well kept secret. Obviously, "all" of Drakeford's clients were impacted.
For example, Terra Energy Resources.
On 8/4 they filed an 8-K indicating the following:
"On June 24, 2009 the Issuer was notified that the Drakeford & Drakeford, L.L.C. (“Drakeford”), the Company’s certifying accountant, would not stand for re-election. The Issuer understands that the decision of Drakeford not to stand for re-election was based upon the revocation of the registration of Drakeford by the Public Company Accounting Oversight Board."
On 10/2 Terra received a letter from the SEC saying, among other things, "Reference is made to our letter to you dated July 15, 2009. As requested in the last paragraph of our letter to you, please tell us how you intend to address any re-audit requirements. The requested response should be filed within five business days."
Whether Spongetech received similar communications or not is not my point. My point is that at least one of Drakeford's clients, a client that was not in mid-audit I might add, was aware of the revocation eight(8) days after it occurred.
There is NO excuse for Spongetech to not have been aware of Drakeford's revocation on a timely basis. In fact it should have been difficult for them to ignore.
Wadi,
2 birds one stone:
The "ineffective" amendment issue is addressed in this table:
http://messages.finance.yahoo.com/Business_%26_Finance/Investments/Stocks_%28A_to_Z%29/Stocks_S/threadview?bn=100008&tid=106111&mid=107721
And you're right about the restriction issue.......it happens to be governed by the 1933 Act, but the 1933 vs 1934 question is moot.
K,
I'm pretty sure that that was really Avi Mirman. He seemed sincerely miffed and offered up what sounded to me like authentic details. Patchman's following statement, which I wasn't aware of when I posted AM's quote, seems to support the connection:
"In this document you will read about 20 Million shares due and you will read how those shares (warrants) can not be delivered because there are no shares available to deliver."
I have not been able to find ANY documents like that published on my own and no one I know of has either. If you have time and are so inclined, the following will take you to the NYS Unified Court System documents, such as they are....not very helpful.
Try this link and enter the letters:
http://iapps.courts.state.ny.us/webcivil/FCASMain
Click on "Party Search"
You may be taken to another page requiring letter entries.
Enter Cresta Capital in the Party Name page, as plaintiff, and click on Find Case.
Click on the highlighted Index number (004584/2010).
You'll be taken to a mini page with a number of menu items across the bottom. In other cases, specifically the MSG case, one of the menu items is "E-filed Documents", which in the MSG case takes you to copies of all the documents in the case. For reasons that are above my pay grade that tab does not appear in the Cresta case. What this means to me is that patchman has been able to secure whatever documents he has outside the Unified Court System file program.
Please note that I MAY be all wet on this Cresta connection, but I don't think so. I was surprised to read patchman's statement that "This memo is a document found in a court case filed in New York City." The Cresta suit was filed in Suffolk County, not NYC.
Good Luck.
ps. For some reason I am unable to view his most recent .doc link. I hope this still makes sense in terms of what it contains.
Karma,
I think that it's generally accepted that the suit involves Cresta Capital (Actually there's a suit and a countersuit involving Cresta).
While I have no idea what's hiding under the redactions, maybe you'll at least find this interesting......I know you do Yahoo, so maybe you've seen it:
In early March a principal of Cresta, Avi Mirman, went to the Yahoo board and made a plea for posters to help him identify Mingy.......he was accusing Mingy of various forms of harrassment. Anyway he put up a handful of posts, all on one thread, and split. His first post included the following statement:
"1. Cresta has a warrant to purchase 20,000,000 shares of SPNG at .0083 as a result of our investment banking agreement.
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_S/threadview?m=mm&bn=100008&tid=123202&mid=123202&tof=-1&rt=1&frt=2&off=41
I don't know if that warrant is involved at all, but it wouldn't surprise me. It's worth $700,000 bucks plus at todays pps.
"That is not the case here"
Ris,
I'm pretty sure that you're right about that. Quite sure. But just for the sake of argument on a rainy New York morning, and given that we are being deprived by the company of any filings that would document the issue, consider this:
The company has issued shares to RM in the past for cash flow needs. They have indicated an intent to repurchase those shares and, at least on some occasions, indicated their intention to cancel them upon repurchase....versus re-issuing them as needed. eg., from the last yellowed 10Q:
"On April 16, 2009, RM Enterprises cancelled 526,585,544 common shares to reduce the common shares issued and outstanding from 1,249,451,605 to 722,866,061 common shares. These common shares were put back into the treasury."
It is my understanding, and this may a big hole in the argument if incorrect, that the fact that those 526m shares had been canceled did not alter their status in terms of the authorized amount. That is to say, the authorized number at the time (1,250,000,000) included the 526m shares even AFTER their cancellation for the purpose of determining whether additional shares could be issued.
Continuing under that assumption:
Suppose the company basically used the shares as a credit line, issuing shares as needed and then repurchasing and canceling them when cash position allowed, requiring a regular increase in authorized shares to accommodate the routine. Resulting, as Karmasaur suggested, in a couple billion canceled common shares residing in the treasury....where they can't participate in eps calculations, voting, market impact, etc........yet still eat into the authorized share number.
Other factors make this seem like a silly argument. The simplest one is:
Why not just hold them for re-issue and not cancel them? That would eliminate the need to constantly increase the authorization.
Maybe that method would highlight the appearance of the process being an interest free loan from a related party.
For which shares were issued as security. Marketable if the loans weren't re-paid according to unreported terms.
I don't know. Obviously. But I offer it up as food for thought, which MIGHT support Karma's concept......if not reasonably, at least in theory.
On the bottom row it appears that the eye shadow applicators are hung so we can see the back. I'm having trouble zooming in and maintaining resolution. It seems to say:
"Manufactured for Dicon Technologies Black Creek, GA. XXXXX
Made in China"
Am I reading it right?
It appears that the GS motion to be relieved of duty was granted by the court on 4/15.
Reseller,
Looks like you were right and I was wrong. Hardly seems possible :o)
Gersten motion + Fedex to Shelowitz seems to = Cresta
There appear to be no e-filed documents.
And still I'm confused. Where's Waldo?
I believe that any updates to the document file are made at 3 and 9PM:
http://iapps.courts.state.ny.us/iscroll/SQLData.jsp?IndexNo=600065-2010
Most of 'em. Thanks.
You seem to be saying that the end result is a foregone conclusion and that the mere appearance without representation will result in an immediate judgment.
No second chance? No "Come back with an attorney"?
We've been provided separately with an example of a request to withdraw in another case yet I see none here. Don't they have to clear the pro se issue prior to a hearing? Does the pro se indication as "attorney type" in the case file not imply that a change to that status has been ruled on?
The schedule today calls for a pre-trial "oral argument". Does that fact affect the immediacy of your expectation?
"a motion for summary judgement can now be brought"
FL,
FWIW, that's where we started this mess several months ago......request for summary judgment. We'll know soon enough if the decision to appear unrepresented is a sign of acquiescence.
tt,
Sure looks that way.
Just a minor point:
The DP document is entitled "GS relieved" by DP himself. The document is actually only SG ASKING the court to be relieved. That said, I suspect the court would have granted the request.....but that's just my uneducated guess.
"SPNG is still without an attorney"
I noticed that statement in the documents and don't recall questioning it. And regardless of why Heller's gone it ain't good.
ps. Link worked fine.