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Tomorrow.......MSG.
Plaintiff's motion for summary judgment on calendar after a couple agreed upon delays.
P: Pike is assured they are Free trading
and is shown the Opinion Letter to prove it.
L: One cannot buy shares at a 40% discount and have those shares be afforded the same treatment as any other shares.
P: Yes, one can buy free trading shares in bulk that are free trading.
I didn't know this. You are saying that a publicly held company can privately sell shares at a 40% discount and that those shares can be sold in the open market the next day? Is this true?
XXXXXXXXXXXXXXX
P: Since he still holds the original 100mm plus whatever he buys in the open market, his filings will show the total owned until he elects to cover, if ever, or returns the first 100mm to the Mutt Bros.
So, as I said, he ends up with a filing showing he owns 200,000,000 open shares and yet he owns no shares. Right? Or are you suggesting that he files the short coverings and returns to M&M as sales/dispositions?
XXXXXXXXXXXXXXX
Then you changed your scenario. Instead of Pike laying out the cash for the second 100,000,000 shares at .045per, M&M front him the money for that purpose. Yet you neglect to mention that M&M outlay when you sum up: "The Mutt Bros don't actually get stiffed either, since they already have the original $10.6 million AND will get the 100mm shares returned to them".
And on the issue of the pps on their initial 100,000,000, a highly suspect poster (me) showed quite a while ago that it was $.138, not $.106:
(I compiled the number of shares purchased and the dollars spent to purchase them on the first 2 Form 4's that were filed.
They totaled 45,570,000 shares and $2,037,825 (resulting in an average pps of $.0447).
http://www.sec.gov/Archives/edgar/data/1201251/000101359409001621/xslF345X03/spongetechfm4-102909_ex.xml
http://www.sec.gov/Archives/edgar/data/1201251/000101359409001678/xslF345X03/spongetechfm4-122409_ex.xml
The cumulative shares purchased and dollars spent were first reported by Pike on their 13D filed on 12/24.
It reflected a total of 145,570,000 shares and $15,871,027 (an avg pps of $.109).
http://www.sec.gov/Archives/edgar/data/1201251/000101359409001676/spongetech13d-122409.htm
Deducting the intervening purchases from the cumulative purchases resulted in the original 100,000,000 shares having a cost of $13,833,202.....or an average pps of $.138.)
XXXXXXXXXXXXXXXXXXX
So, just for fun, let's see where we end up:
Assumptions
1. Pike pays M&M $13,800,000 for 100,000,000 million shares.
2. Pike shorts 100,000,000 shares @.23per. (.23-40%=.138)
3. Based on your plan B, M&M fronts $4,500,000 to buy another 100,000,000 shares.
4. Pike covers his 100,000,000 share short position and gives M&M the other hundred million.
Summary
1. Pike is up $9,200,000 and has a slew of false filings.
2. M&M are up $9,300,000.
3. Share positions are the same as when the party started.
Fantastic!
Not buyin' it.
wer,
Just an FYI,
If you click on the link that says Spongetech Delivery Systems, Inc. (SPNG) above this post it will take you to a page that has a link saying something like "post New Message". You can use that next time and make contact directly.
Virtual,
No PM for me. I believe that you are positioned perfectly :o)
I was just tweaking pj, sorry you got hit with a little shrapnel. I trust that you both know that it's all in good fun.
Best of luck to you as well.
Hey boy,
"If you think that shorting a stock at $0.04 and having it go to $0.0000 generates anything other than a 100% ROI, all I can say is it's no wonder you're long Spongetech."
You must be kidding.
It doesn't. And if your calculator says that it does you need a new one. Go bang on it some more using a denominator of zero and see if the answer changes when you change the numerator. Get back to me if the answer is ever 1 (hence 100%). I'll wait.
And your attempt to get me to cough up my position is as weak as your math.
GLTYT, A.
pj,
Let me make sure I understand this:
1. Pike, who late in your post is described as "a guy who knows the ropes", buys 100,000,000 shares at a 30-40% discount to the market.
2. Pike the rope-knower readily accepts the representation that they are his to trade at will.
3. He shorts an equal amount of shares and pockets the cash.
4. He is then shocked to read in the financial section of the NY Post that there may be some chicanery going on at the company in which he made his discounted purchase.
5. Upon further research he realizes that he's been had! One cannot buy shares at a 40% discount and have those shares be afforded the same treatment as any other shares.
6. Pike is P.O.ed. Someone must pay for his ignorance! He tells M&M that he's going to hold those shares no matter what they say! (I can't have this right, but "holds the original 100 Million shares hostage"?). And he makes some kind of deal, which I DEFINITELY don't understand.
6. The company is required to file the registration of its shares at the end of September. He subsequently files a Form 3 indicating that he is a 10% beneficial owner in spite of his net position of -0-, reflecting the discounted 100,000,000 share purchase.
7. He commences to buy shares in the open market, with the intent of covering....or covering as he buys....the original 100,000,000.
8. He achieves a 20% ownership position and files a Form 13D accordingly.
9. He files Form 4's and Schedule 13D/A's showing his accumulating shares as he buys them.
10. When he reaches 100,000,000 shares accumulated at an estimated $.045, the above forms will show that he holds 200,000,000.
11. He covers his short position and returns the original 100,000,000 to the company, neither of which result in a filing.
This leaves him holding a couple forms showing that he owns 200,000,000 shares that he no longer owns and, using your estimated pps's, $1,500,000. (BTW, the math showed that his original 100,000,000 shares cost him a little better than $.13, so if the rest of it is right, he's actually a couple mill in the hole).
Is that so?
Did Virtual put you up to this?
Things just haven't been the same since they canceled Picture for a Sunday Afternoon, are they?
:o)
"If you short a stock at $0.04 per share and it goes to $0.0000 what's your ROI?
If you come up with anything other than a 100% ROI
I can prove mathematically to you that you're wrong."
The "I" part of this equation is zero. If you can prove mathematically that ANY return on an investment of zero generates a 100% ROI, "I can prove mathematically to you that you're wrong".
"shares he doesn't have to report having sold immediately. "
Of course he'd have to report both those buys and sells.
ckir,
You're absolutely right. He has to file in 2 days. So, if he buys one day and again 2 days later he incorporates all the buys into one filing, making that filing precisely on the day that it is due based on the first buys. One could say that, if his real purpose was to gain attention, he'd hold off and make a second filing 2 days later. In fact, he'd probably make the filings on the day he made the buys........then he'd REALLY be early.
This is silly. He's just being practical.
"01/14/2010 DICON patent WITH Reckitt Benckiser, WHY?"
What you are seeing is not a patent. It is a patent application which was filed on 5/11/09, which the US Patent and Trademark Office published on 1/14/10. No patent has been issued.
The inventors assigned the patent, should one be issued, to both Dicon and Reckitt Benckiser somehow. And filed the application at a time when Dicon's relationship to SPNG was supplier/customer.
"Why did Reckitt Benckiser associated itself with us on January 14, 2010? "
They didn't.
"Pike did not have to file a 4 until Monday - so he filed early "
Not true. He had to file the buys from the 24th on the 26th.
Did SPNG or RME end up with that "Investment by settlement" in GFGU? Because GFGU announced before today's opening the invention of something that sounds like Google Shopping. Except instead of entering a product name you aim your cell phone at it and it recognizes it by its shape....no logo, barcode or glow-in-the-dark magic symbols necessary. 3-D product recognition.
PPS was down a bit on the news.....guess the market was disappointed.
http://finance.yahoo.com/news/Getfugu-Announces-Completion-iw-1250046581.html?x=0&.v=1
"If you mean "was I sitting at the table" or "listening on the telphone" when the lead investigator said "We're done Mosky. We have everything we need. Is there any final thoughts, comments or issues you wish to raise at this point, because we are packing up and going home"? If Mosky had nothing more to add, the investigator would have stated "Then it's the Wells"."
"I wasn't there."
Thanks. That's what I meant. I guess I must assume that you would add "nor was I told by an involved party". Some things we can't know without asking, especially when a statement implies otherwise.
And I would not have bothered you further had you only begun your post with:
It's reasonable to conclude both that the SEC "field investigation team" is done and that before they left in Mid-December they informed Mosky of the Wells notice....
instead of:
"The SEC "field investigation team" is done. Before they left in Mid-December they informed Mosky of the Wells notice....."
I'm sure you appreciate the difference. An investigator would.
Thanks.
Just checking to make sure that those statements were logic and not fact-based.
"The SEC "field investigation team" is done. Before they left in Mid-December they informed Mosky of the Wells notice...."
How do you, personally, know those things to be facts?
While the remainder of the post is presented as your very reasonable conclusions based on the normal sequence of events, you begin the post with statements of fact.
dp, rec, reg:
I think what started as a simple misunderstanding has gone awry.
Reg used the phrase "after full investigations".
dp asked how reg knew the investigations were complete. Which strikes me as logical enough....after all, how can an investigation be full without being complete?
Bottom line is we don't know if the investigation is complete, so we don't know what the SEC staff concluded. All we can do is draw assumptions based on the Wells notices. And while the SEC does prefer to have the investigation near completion prior to the issuance of the Wells, it wouldn't be proper to assume from that that it is, in fact, complete.
I just realized approximately how much cash Pike generated with his ADY sales in the period covered by this post:
http://investorshub.advfn.com/boards/replies.aspx?msg=46903094
On 5/22/09 he held 1,500,000 shares. On 2/16/10 he held 275,000 shares. At $30 per share average (ballpark) he raised ~$36,000,000 during that time. I think he spent about half of that on SPNG shares. As far as I could tell he did not file any beneficial ownership forms during the period showing any buy transactions..there were a few Parlux exchanges within the funds, but no cash laid out.
So either he has another $18mill or thereabouts laying around or he has been buying shares in companies in which he is holding less than reportable quantities or he has been buying preferreds or bonds or something else that doesn't require him to file.
Just thought it might be interesting to show that he might still have a couple bullets in the chamber.
Simply put: "Smoke and Mirrors".
There's certainly plenty of that going around, but this appears to be the uncompensated transfer of a business entity. Apart from the inability to assign it a dollar value it's no different than the actions that you wanted to put people in jail for yesterday. Mind you I'm not recommending that in this case, but it's not an SEC issue except to the extent the transfer has gone unreported. Until it's otherwise explained, the SPNG shareholders have made a donation of unquantifiable value to VAEV. Which might be fine with some, but the fact that both firms have some common management and directorship makes it, at the very least, one step beyond mere "smoke and mirrors".
reg,
The rules don't require it in the Q and it looks like it took until Q1 of 2009 for them to realize it.
http://www.law.uc.edu/CCL/regS-X/SX8-03.html
Definition of smaller reporting company at:
http://www.law.uc.edu/CCL/34ActRls/rule12b-2.html
Reg,
Interesting post. There has been some coverage here of the "licensing" of the America's Cleaning Company monicker to Vanity.
Your link to the 2008 10K makes me wonder whether it was a licensing issue after all. In addition to your quote, it also says:
In July 2008, we incorporated 6 wholly-owned subsidiaries in the state of Nevada. They are:
· Spongetech Kitchen & Bath, Inc.;
· Spongetech Health & Beauty, Inc.;
· Spongetech Auto, Inc.;
· Spongetech Medical, Inc.;
· Spongetech Pets, Inc.; and
· America’s Cleaning Company.
Yet, in the company's most recent PR of 2/12/10, we see:
SpongeTech continues to operate its 8 wholly-owned subsidiaries that support its growing business activities. The subsidiaries are as follows:
Dicon Technologies, LLC
SpongeTech® Europe
SpongeTech® Health & Beauty, Inc.
SpongeTech® Kitchen & Bath, Inc.
SpongeTech® Auto, Inc.
SpongeTech® Medical, Inc.
SpongeTech® Pet, Inc.
The Smarter Sponge Company
One has to wonder what the nature of the transaction was that resulted in a SPNG subsidiary exiting and levitating its way over to Vanity. That's not "licensing" in the traditional sense of the term. And if there was a sale I must've missed the filing.......which there certainly should've been, especially if they followed through on their original plan:
"We plan to engage in our proposed different lines of business through each of the subsidiaries and to hold all intellectual property in our America’s Cleaning Company subsidiary."
ps. FWIW, a quick and dirty search of the Vanity filings shows the first and only filing referring to "ACC" in the 10Q for the quarter ending 9/30/09 as follows:
"In July 2009, the Company seized an opportunity to utilize the America’s Cleaning Company™ trademark and, after careful research regarding the cleaning services industry, began developing a cleaning services division. In September 2009, this division of the Company began servicing both residential and commercial clients, and has seen business increase on a week-over-week basis. The cleaning services division has also developed what it believes will be a recognizable brand that will be used both for its services and for products which it intends and developing and/or licensing."
dp,
I believe that this term excludes SPNG from the regulation: "The rule generally applies to all equity securities that are listed on a national securities exchange, whether traded on an exchange or in the over-the-counter market."
So institutional and retail traders alike can continue not shorting SPNG without fear of interruption :o)
I haven't shorted a stock in a long time and don't plan to, but for what it's worth I'm not a fan of any artificial impediments to either long or short trading. And I don't think that Wall Street is either....everybody prefers that the government leave well enough alone until the other guy finds an edge. What it will accomplish is a little panic and a minor change in strategy. And by the time it's implemented both of those effects will likely be pretty subdued. Unless there's a major market event and then the broker system will probably have trouble implementing it and the regulatory authorities will find it impossible to enforce.
Sorry for the negativity. I grew up in a time when the phrase "there is no gravity, the earth sucks" was born.
EEL,
Just to be clear, all the beneficial ownership filings since April have had to rely on that 10Q filing. And the market cap calculation at any point in time since then has been the current pps of the day times 722 million. And it will be the current pps of the day times 722 million until a filing is made that updates that number.
So it's not correct to say "that's a lot more than we've known about the share structure."
We know nothing more than we knew in April, at which time the number of shares outstanding was 722 million.
I hope that's clear.
"The shares that Lazauskas has to sell to pay the 650K, do they have the super vote that SM and MM have?"
The "super vote" shares are Class B shares. For those to be involved in the court-ordered sale of the Lazauskas holdings at Ladenburg would first have required their conversion to common on a 1 for 1 basis. There's no evidence that that has occurred.
The short answer is "almost certainly not".
"Will Someone Buy Mosky an Accounting Software Package, so he can keep track of the checkbook balance."
Actually, if he is to be believed, he had a pretty good handle on his checking account balance.
In his affidavit he contends that SPNG didn't owe the $70M to MSG. So when he became aware that they intended to deposit the check, saying according to SM, "whether SDS liked it or not", he drew down their account to force it to bounce on presentation. The fact that he was able to do that without bouncing any other outstanding checks could only mean one of two things. Either 1)there were no other outstanding checks on the account or 2)he's clairevoyant. Actually, there's a third very distant outside possibility: He determined which outstanding checks hadn't cleared, contacted the payees and asked them to destroy the checks.....promising replacement checks and asking them to hold the replacements until the MSG check bounced....and either drew the balance out of the account or drew it down below $70M. It would've been much much easier to do what RM did....Stop Payment.
I'm not suggesting that this happened (personally I don't believe that it did).....only how it could have. If I had to guess, either the check was drawn on a very lightly used, perhaps dormant by intent, account or somebody was just plain tap city.
I would be, too...if I could do it with somebody else's money.
No need for that...I was itching to tell the check story anyway:o) Thanks for the excuse.
I don't remember the Cresta deal and I'd like to forget GFGU, but that's why I said I wouldn't plop down $360,000 without at least a signed napkin saying what it was for.....
But you're right, there's been a lot of money flying around and damn little definitive paperwork.
pj,
All of it!
http://iapps.courts.state.ny.us/iscroll/SQLData.jsp?IndexNo=600065-2010#
After you match the funny letters it should pop right up. If not, the 600065-2010# should help.
See Exhibit A. Blow it up.
compliments of Scion.
I'm not sure what this means. I was trying to help.
"OK, why the update?
Contrary to all the crap on this board, do some research.
Has os been supplied recently?
Is anyone required to file?
Run it by the error group."
Any special reason you decided not to look at the link that I provided in the post?
And I think I know the difference.
("There's a tiny little difference between the two. ;)")
JC,
No opinion, but a couple observations.
There's obviously enough of a disagreement on the facts, which I don't think the court will be able to ignore, so I think SM's affidavit will probably successfully overcome MSG's request for a summary judgment. And a summary judgment for dismissal would be extremely unusual. Guess those are opinions, huh?
The clearest disagreement is on whether SPNG owed MSG any money either when they handed them the check (the $70M job) or when MSG banked it. I noticed something interesting on the face of the check that might be pertinent. In the area normally used for "purpose" we clearly see "7843-1" preceded by what MIGHT be "INV#". To this layman's eye the 7843-1 was written by the same person that wrote the numerical dollar amount and the date...logically then by the drawer. In the same area, in what appears to me different handwriting, we see "cust 16729"....it wouldn't be unusual for a notation like that to be made by accounts receivable personnel. Jamming that steaming mound of speculation together, I couldn't help but wonder "If SPNG is providing an invoice number and MSG is applying the check to their account, how much of a leap is it to think that SPNG owed them some money?"
What for? I have no clue. The very last item in the affidavit says something to the effect that (paraphrasing) if MSG meant to include the Auto and Pet subsidiaries (with whom 2 of the 3 agreements were made) in their claim they should've included them in their original filing. This statement comes out of the clear blue sky....which frankly leads me to believe that it has something to do with things. Tickets are part of one of those deals and SPNG is obligated to cover the production costs of some of the advertising materials in one of them also.
The real situation with the RM check is beyond me. Every time they draw a check something funny happens. All I can say about it is, no matter how much money I had, I wouldn't plop down $360,000 without at least a signed napkin saying what it was for...and in reasonably specific terms.
Finally...it doesn't make any sense to me that the case can go forward without it being severed. If it's true that there are no MSG agreements with RM, then it doesn't make any sense to me that SPNG and RM should be co-defendants. I'm not a shareholder, but if I was I'd be wondering why I'm footing a piece of RM's legal bill....unless it's in return for
You know where this goes.
Luppy,
He originally filed a 13G.
http://sec.gov/Archives/edgar/data/1201251/000101359409001617/spongetech13g-102909.htm
However, he could no longer use that form when his holdings exceeded 20%.
"Notwithstanding paragraph (c) of this section and Rule 13d-2(b), persons reporting on Schedule 13G pursuant to paragraph (c) of this section shall immediately become subject to Rule 13d-1(a) and Rule 13d- 2(a) and shall remain subject to those requirements for so long as, and shall file a statement on Schedule 13D within 10 days of the date on which, the person's beneficial ownership equals or exceeds 20 percent of the class of equity securities."
http://www.law.uc.edu/CCL/34ActRls/rule13d-1.html
"I knew it was an amendment but why was an 13D amendment not filed with the last batch of stocks that pike bought?"
Actually there were....remember those "private transactions" where he just swapped shares between his own funds don't count.
http://sec.gov/Archives/edgar/data/1201251/000114036110001954/0001140361-10-001954-index.htm
"If it does nothing then why does the 4 form not suffice?"
Not smart enough for that one.....but the 4 doesn't provide for the filer to indicate his intentions, while the 13D does.
sd,
The 13D is actually a 13D/A (A=Amendment). It simply updates the new cumulative holdings of the Pike entities based on the recent buys reported on the Form 4 filed last night.
There's really nothing in the way of new information on it.
ps. He bumped past the 20% mark a while back and that DID require the filing of the original Form 13D.
Big,
re: "What about the time line on the restricted shares that were issued as payment for services in lieu of cash?"
I have 2 answers:
#1, and most reliable answer is "I don't know for sure".
#2:
I believe the officers of the company were issued common shares (versus Class B) in lieu of cash for salaries a number of years ago. To the extent that they were restricted I'm quite certain that whatever period applied has expired.
If you were asking about shares issued to non-employees, as in the following that were reported in the last 10Q filed....
"On July 16, 2008, the Company issued an aggregate of 2,253,436 shares of common stock to Sichenzia Ross Friedman Ference LLP as compensation for legal services rendered to the Company.
On June 2, 2008, the Company entered into a consulting agreement with R.F. Lafferty & Co., Inc. pursuant to which R.F. Lafferty & Co., Inc. agreed to provide certain strategic financial and advisory services to the Company for a two-year term. In consideration for their agreeing to act as a consultant, the Company agreed to issue an aggregate of 2,000,000 shares of common Stock to R.F. Lafferty & Co., Inc."
.....I believe that those shares are issued free of restriction and are available for immediate sale. I THINK (see answer #1) that restriction only applies to 1)employee issuances and 2)Sales of shares that are not also offered for sale to the public.
Wish I could give you a more certain answer.
Karma,
I belated realized that most of my previous post had already been covered.
I left the following 8-K quote out of it regarding the transfer of Class B shares:
"No person holding shares of Class B Stock of record may transfer, and the Company shall not register the transfer of, such shares of Class B Stock, as Class B Stock, whether by sale, assignment, gift, bequest, appointment or otherwise, except to a permitted transferee (as described in the Certificate of Amendment) and any attempted transfer of shares not permitted shall be converted into Common Stock as provided by subsection."
Any attempt to determine what a "permitted transferree" might be required a wait of about 14 months.
Note that the above was filed on 7/28/08, referring to a Certificate of Amendment filed on 7/16/08. For some reason the company appears not to have made that CofA public until the Form 8-A registration was filed on 9/28/09. Unfortunately it is in a form that I cannot copy and paste.
http://www.sec.gov/Archives/edgar/data/1201251/000114420409050269/v161426_ex3-3.htm
FWIW, the restrictions on the transfer and estate handling of Class B gets a ton of ink in the above document. However I haven't found any filing at all that describes the general basis for the actual issuance of Class B shares. The basis for the issuance of the original 10,000,000 was covered in the July 8-K. 18,000,000 have been issued since, some to an outside entity (RME), without any explanation at all.
If there were no other reasons at all for this being a penny stock, this alone would be a good one.
Karma,
From the 8-K announcing the initial issuances:
"Description of Class B Stock
Holders of Class B Stock are entitled to vote on all matters submitted to shareholders of the Company and are entitled to 100 votes for each share of Class B Stock owned. Holders of Class B Stock vote together with the holders of common stock on all matters.
Each share of Class B Stock is convertible at the option of the holder, into one fully paid and nonassessable share of Common Stock."
http://www.sec.gov/Archives/edgar/data/1201251/000114420408042150/v121013_8k.htm
I saw nothing that required a waiting period and I don't think the term "unrestricted" applies. Actually they appear to be free to make the conversion at any time.......the issue of whether they could immediately sell the common would have the same treatment as any of their other common holdings.
Anyway, would they give up control of the company for $1,120,000 (.04x28,000,000)?
I know this is risky, but......
YOU HAVE TO BE KIDDING, RIGHT?
In case you aren't.......175,000,000 divided by 723,000,000 is 24.2%.
" And if he signed an NDA, would that give him the right to then buy shares based on what he knows? My guess is 'no' he couldn't. But that's just a guess. "
You don't have to guess about that. It's true. Unless the NDA covered Metter's shoe size or some other useless non-public information.
OT,
Thanks for responding...sorry my post was so confusing. Judging from the lack of response to some of 'em I guess a lot of them are.
I'll simplify it if I can do so without missing the key stuff:
Right now the current SPNG investors and any potential SPNG investors don't know whether Pike can legally buy or sell shares.
And I don't like it.
If SPNG were to PR an NDA with Pike, which they can and as ADY did, there is no rule that allows current and potential investors to know at what point in time thereafter that Pike could resume legally buying or selling shares.
I don't like that either.
I would propose, to keep it simple, that any NDA between a beneficial owner and an issuer be reported as a material agreement in an 8-K.......not it's substance of course, but the act of signing the agreement. And should the purpose of that NDA be no longer required by the parties, that fact should be filed as a dissolution of the NDA in an 8-K as the termination of a material agreement.
This would allow the public to know whether an investor in the position that Pike is in, a beneficial owner, is not buying or selling because he doesn't want to or because he can't.
I'm starting to think that I'm the only one who thinks it matters.....but don't nobody be asking me why I think Pike isn't trading :O)