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"They have been marketing it as "The Smarter Sponge TM" since june or july of last year. I'm sure if some other trademark thought it was infringed upon, they would have already done it."
Maybe. Then again maybe the Smartsponge folks aren't concerned about the confusion but the USPTO is. The markets obviously don't have much overlap.
Still:
An "office action" was sent to the SPNG attorney on 9/25/09 stating:
"Registration of the applied-for mark is refused because of a likelihood of confusion with the mark in U.S. Registration No. 3427977.
And
"The application was not signed and verified, both of which are application requirements."
And
"TO AVOID ABANDONMENT, THE OFFICE MUST RECEIVE A PROPER RESPONSE TO THIS OFFICE ACTION WITHIN 6 MONTHS OF THE ISSUE/MAILING DATE."
The link, which is current, shows no evidence of a response.
http://tmportal.uspto.gov/external/portal/tow?SRCH=Y&isSubmitted=true&details=&SELECT=US+Serial+No&TEXT=77767201#
That said, I'll be darned if I understand how they can do this:
"SpongeTech(R) Delivery Systems, Inc. Announces License Agreement to Use Trademark of 'The Smarter Sponge(TM)"
Seems they are licensing the use of the unregistered trademark to someone else. Can they do that?
I'm surprised that they even brought the Martin Act up. From what little I know about it the plaintiffs have a greater risk of exposure to it than the defendants.
Tonight's PR appears to be identical to the one released on 4/19.
"The company chose to not satisfy the SEC's Informal Investigation requests. No-one would have known about the Informal Investigation because the SEC conducts Informal Investigations privately with the subject, PUBLIC company."
Seabiscuit,
I was wondering if I was ever going to see the phrase "Informal Investigation" again.
Are you certain that there was one? It is my understanding, from the linked Enforcement Manual, that the term is interchangeable with the term Matter Under Inquiry (MUI).
"The threshold determination for opening a new MUI is low because the purpose of a MUI is to gather additional facts to help evaluate whether an investigation would be an appropriate use of resources."
A MUI can be converted into an investigation:
"Investigations are opened in two ways: 1) the investigation is opened when a MUI is converted to an investigation (which occurs automatically sixty days after the MUI is opened), or, 2) an investigation is opened independently, either prior to the sixtieth day automatic conversion of a MUI or without any history of a MUI in the case." So the rules don't let us assume that there was a MUI.
"Sixty days after a MUI is opened, the MUI will be converted to an investigation unless the MUI is closed prior to the sixty day mark."
"The evaluation for whether to convert a MUI to an investigation (or open an investigation) turns on whether, and to what extent, the investigation has the potential to address violative conduct."
So an informal investigation, if there was one, could have begun as early as mid-July.
http://www.sec.gov/divisions/enforce/enforcementmanual.pdf
I've always wondered whether an informal investigation preceded the formal version and now I'm wondering how much of the information published in September which is noted in the Post complaint, the factual nature of which is to be determined by the judicial system, might have been established or disproven by the SEC in the months preceding September.
Any ideas? Do you KNOW by any chance whether there actually was an informal investigation?
TIA
"The perfect legal defense to slander or libel claims is that the statements made are true."
I've said nothing to the contrary. In fact, I was TRYING to say exactly that.
"loanranger, you are 100% mistaken. "
Wow. 100%?
Having been through this twice I'm reticent to go through it again...especially given your incongruous opening statement ("As a defendant in a libel case, I do not have to prove that a statement made is not true"). Maybe we're a little excited?
The Fisher-Price version:
The plaintiff alleges in its complaint that the defendant has made false statements of fact (not opinions, as you state......opinions can't be "false") with malice and that those false statements of fact damaged the plaintiff.
At no point have I said, nor would I say, that the defendant is obligated to prove that the statements made are not false, but rather that a defense would be successful if it could prove that was the case.
My apparently 100% mistaken opinion is that, should the defendant in his response to the complaint be able to establish that the statements were true when made, then the plaintiffs case would fail. The phrase "the truth is an absolute defense" REQUIRES the defendant to establish that the statements are not false as the plaintiff contends. That FACT does not obviate the plaintiffs requirement to state its case in its complaint. And there are other defenses available to the defendant. If you believe any of the above not to be the case please provide a source supporting your belief. Until then I will risk whatever a message board poster risks when he expresses his understanding of an issue incorrectly for a third time.
I've been wrong before and I'll be wrong again. It's unfortunate that you have not seen fit to bring the following to my attention when they occurred:
"You make statements that are inaccurate here all the time. Some against me."
I have no horse in this race and am here only to express my opinions and learn from others. I do my level best to address issues without making statements against people and feel I've been reasonably successful in that regard. I realize that you are a busy man, but the next time you notice one of my inaccurate statements, against you or otherwise, please do me the courtesy of pointing it out......so that I might learn from it or respond.
"The burden to establish truth is on the defendants.
No it isn't. EVER."
I never should have left that statement out there all by itself.....this is the second time that I've had to, er, defend it.
If you were to look at the preceding posts you would see that I was referring to the fact that one of the defenses against a libel action is that the statements alleged to be false are, in fact, true. And, in order for that defense to be successful, "the burden to establish truth is on the defendants".
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=49391832
OT,
The author spelled defense with a C once too often for me to ignore it.
:o)
" The SEC suspension notice is all one would need to establish the "Truth" you describe. "
I'm not trying to be arbitrary, but that's not correct. Besides, it's tough for an action taken in October to have a bearing on statements made and articles published in September.
And the "I'm afraid" reference was to your statement ("I'm afraid that's never the case in U.S. courts.") and how taking a comment out of context can lead to an incorrect conclusion. It wasn't meant as a serious question.
Steve,
You're jumping on board midstream and taking the statement out of context.
"The burden to establish truth is on the defendants" when the defendants are exercising the "truth is an absolute defense" argument in a libel case.
eg. "I'm afraid".
You're not really afraid, are you?
Context, Steve.
kk,
Thanks much. I should've thought of that.
This is an even hotter hot check than the other hot checks.
Obviously there's a pattern established, but in addition to that I believe that the issuance of a "closed account" check carries legal implications with it in some states that NSF and "payment stopped" checks do not. Something about implied intent.
oa,
I just zipped thru the complaint for the third time (wish the damn thing was searchable) and found no reference to "authorized shares" in any context. But in case I missed it, I would offer two points:
1. The burden to establish truth is on the defendants. No matter how reasonable the assumption that the increase of A/S was to accommodate an increase in O/S may have been, it was still an assumption that the defendants alone are required to establish as true when the statement was made. True and reasonable are different.
2. While there is little doubt that they could force the company to produce financial statements that supported that truth, it is another thing entirely to require them to publish previously unpublished statements for that purpose. It strikes me as unlikely that they would have success subpoenaing either non-public documents or documents that can't be established to be in existence for this purpose. Other actions...class action or SEC litigation.....would presumably be different in terms of this issue.
jmpso (purely speculative)
"It comes down can SPNG prove the NY POST, Patch, Sykes and John Doe 1-10 were lying."
Actually the opposite appears to be true and I was unaware of it.
Rather than the burden of proof being on Spongetech to establish that the statements made by the defendants are false, the article linked previously and again below indicates that the defendants are obligated to prove that the statements in question are true in order to avail themselves of the rule saying that the truth is an "absolute" defense.
So the one aspect of this that has been especially interesting (to me, anyway), wherein the contention has been that SPNG will be obligated to produce financials to make their case, isn't necessarily true. Certainly the defendants cannot require the publication of financial statements by Spongetech to use as evidence against themselves. I guess we need to review the statements of the defendants to see which of them they might be required to prove and if they have any numbers of interest in them.
http://www.ehow.com/how_2238562_use-libel-vs-slander-correctly.html
weeble,
Presumably there are other documents to follow, including a copy of the actual agreement. The only one we have so far says "On or about October 8, 2009......".
It may be a situation similar to the Marvel licensing agreement wherein the contract was signed by one party, then sent to the other who signed it some time later. If both parties signed on 10/8 I would expect the complaint to have omitted the "or about".......and yes, it would've been bad business on the part of the Islanders. Unless nobody in the Islanders Advertising Sales department reads the Post.
Tavy,
Link please :o)
What you said is true if the average lifespan is only 32+ years. Assuming that they didn't sleep and that one could actually say a number like 2,777,777,777 in a second.
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.