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OT, I beg to differ.....unless, of course, I misunderstand. Puppy linked you to Pikes investment in SPNG (and everything else) and I linked you to filings related to investments in Pike.
Please link me to the source of your "0-1,000,000" revenue range information and I think I can provide some input regarding your initial question re " Where did he come up with all that money? ". Assuming that that's the question you were looking for an answer to.........if not, then I do misunderstand.
re: Where did he come up with all that money?
OT,
See Item 13's from the following:
http://www.sec.gov/Archives/edgar/data/1365921/000101359409000691/xslFormDX01/primary_doc.xml
http://www.sec.gov/Archives/edgar/data/1220289/000101359409000689/xslFormDX01/primary_doc.xml
Please link me to the filing that shows "Also, his business size, revenue wise, is listed as $0 - $1,000,000." I remember seeing that somewhere but can't find it anymore.
Would that it were an act.....I'm pretty much really that dopey and I'll prove it:
Your post to O-S of a few moments ago suggested pretty clearly to me that you feel that it would be a real treat for the investigators if the company files its 10-K...and I guess that's obvious. Yet the following seems to suggest that you feel the company may be less culpable than the suspension phraseology implied:
"perhaps they dont see the fraud allegations to be quite as serious as some here do..or perhaps i should say as some here hope they are..maybe spng is cooperating fully and there is no need for the sec to take the next step..and in such a case a signed 10k will go far in assisting in their investigation..."
Are you suggesting that you think that it may be in EVERYBODY'S interest that they file the 10K?
If you were the Board (or the one man audit committee), and you felt that the "questions that have been raised about the accuracy and adequacy of publicly disseminated information concerning, among other things, the amount of sales and customer orders received by SpongeTech, investment agreements entered into by SpongeTech, and SpongeTech's revenues as reported in its financial statements" would expose you to some indeterminate legal and financial jeopardy if answered, what exactly would you do in terms of providing information....in form and substance?
BTW, I took it as a compliment except for the old Hudson or Nash or Studebaker or whatever that thing was :o)
"enjoy,thought you were smarter then that.glta"
The filing you provided as support for Pike having the same law firm as SPNG must've required turning over lots of rocks.....it's from 2005:
http://www.secinfo.com/d12atd.z2p6.htm
Pike changed attorneys in or prior to 2007:
http://sec.gov/Archives/edgar/data/1059677/000101359407000291/industrial13da-052507.htm
And the firm that they changed to then is the firm that they use today:
http://sec.gov/Archives/edgar/data/1201251/000101359409001676/spongetech13d-122409.htm
And it's not the same as SPNG's.
THIS you were mistaken about.
But you may have been right about that "smarter then(sp) that" stuff.
Why did you send me that? What was it a reply to?
And for the third time, please tell me how you get "Same attorney for spng!!" out of this:
SEC Info - Pike Capital Partners/LP - SC 13D/A - Q Comm ...... Esq. c/o Gersten Savage, Kaplowitz, Wolf & Marcus, LLP 101 East 52 nd Street, .... This Statement is being filed by Pike Capital Partners, L.P., ...
www.secinfo.com/d12atd.z2p6.htm - Cached - Similar
****Same attorney for spng!! huh
All I need is a link.
Thanks.
Why the change from 13G to 13D?
There's a line in the heading of the form that says:
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box .x
Rule 13d-1 -- Filing of Schedules 13D-G can be found here in its entirety:
http://www.law.uc.edu/CCL/34ActRls/rule13d-1.html
The first possible reason is that the filer has gone from having "acquired such securities in the ordinary course of his business" to "holding the securities with a purpose or effect of changing or influencing control of the issuer, or in connection with or as a participant in any transaction having that purpose or effect".
240.13d-1(e) says the change is required if the "person":
i. Has acquired or holds the securities with a purpose or effect of changing or influencing control of the issuer, or in connection with or as a participant in any transaction having that purpose or effect, including any transaction subject to Rule 13d-3(b); and
ii. Is at that time the beneficial owner of more than five percent of a class of equity securities described in Rule 13d-1(i).
The second possible reason is that the filers position has increased to in excess of 20%.
240.13d-1(f) says the filer "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."
The third possible reason is if the filer no longer qualifies to file Form 13G because they no longer are in a category of investors that allows the use of the shortened 13G format, which permits the exclusion of certain information that the 13D requires.
240.13d-1(g) "Any person who has reported an acquisition of securities in a statement on Schedule 13G pursuant to paragraph (b) of this section, or has become obligated to report on the Schedule 13G but has not yet filed the Schedule, and thereafter ceases to be a person specified in paragraph (b)(1)(ii) of this section ......"
So, the first reason is possible, but we have no concrete evidence of a change in Pike's intent.
The second reason REQUIRES the change to the 13D. However, reason#1 doesn't get eliminated by that fact.
The third reason doesn't apply...there have been no changes in capacity of any of the Pike parties according to the form, so that wouldn't have anything to do with the form change.
Nobody's asking, but I'm inclined to think that the form change was merely predicated upon the increase in ownership beyond 20%....to 20.1%.
If you follow this type of filing you'll notice a tendency of holders to buy up to 5.1% or 20.1% and sell down to 4.9% or 19.9%. This directly affects their need to file on subsequent transactions. Somebody with a more sophisticated knowledge of these things might be able to say what a holders motives might be for such things, but they happen far too often to be statistically coincidental.
The real question is what is motivating the size and timing of his buying. Obviously, I have no idea what Pike is thinking.......just wish I did.
Firstly,
Thanks and Merry Christmas!
Appreciate the confirmation that the 12 month reg. suspension was never used in your experience.
re: "In short, enforcement actions against fraud such as we see in SPNG is apples to revocation for failure to file's oranges."
I thought I was saying exactly that in my question:
"I didn't know that "litigating the case" had anything to do with a revocation. I was of the understanding that a revocation required a hearing in front of an administrative judge and could be justified by being out of compliance.....especially in light of your contention that progress towards compliance is being hindered by a lack of cooperation, which can't be going unnoticed. A determination of failure to comply doesn't require a formal investigation, right?"
Which was in response to your:
"I would think that attorneys could make a case that to swiftly revoke a registration prior to completing an investigation and litigating the case...."
Anyway, I agree that absent other considerations it's too soon to talk about revocation for lack of compliance.....by historical standards. Maybe you could just give me a "yes" or "no" regarding the following and we can move on. Obviously I'm a little slow on the uptake:
Given that the period out of compliance has been relatively short, in your opinion could the company's registration be revoked based strictly on issues other than the compliance issue?
ps. Editing this message because I just noticed this, directed to another poster. "The SEC never does anything about companies that don't file."
You may want to make that go away if there's time.
1j,
There are others that can probably answer the Wells question better than I, but the SEC Enforcement Manual:
http://www.sec.gov/divisions/enforce/enforcementmanual.pdf
seems to say a couple interesting things.....please read Section 2.4 The Wells Process to confirm my understandings:
A Wells Notice is issued to individuals, not to the company.
There is no requirement to issue a Wells notice.....it's up to the responsible SEC Deputy Director.
"The Wells notice should tell a person involved in an investigation that 1) the Division is considering recommending or intends to recommend that the Commission file an action or proceeding against them; 2) the potential violations at the heart of the recommendation; and 3) the person may submit arguments or evidence to the Division and the Commission regarding the recommendation and evidence."
BTW, this isn't a one way street. You owe me an answer:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=44850522
I just found out that I'm out of posts (for the first time) and I owe pj a response....hopefully he's reading this.
I wish I knew what Pike is thinking. His most recent buys aren't material to his position. And the price differential is even less material.....call it .005for 3.6m shares = $18,000...might mean something to you or me, but I'm not sure how much effort Pike would put into saving it. That said, you're right...it should be fairly easy. Here's what I'm wondering..and I'm hoping every body else is too busy with Christmas eve stuff to notice: Window dressing....psychologically "painting the tape" with an institutional buy filing. I know it could be a load of crap, but I don't have anything else to offer.
Merry Christmas!
I guess the boogie man must be rendering pieces of my posts invisible.
Please address the possibility of a 12 month registration suspension:
Can I assume that you've never seen or heard of one given that you weren't aware of the rule?
Despite that, how would you think that it might differ from a trading suspension?
I didn't know that "litigating the case" had anything to do with a revocation. I was of the understanding that a revocation required a hearing in front of an administrative judge and could be justified by being out of compliance.....especially in light of your contention that progress towards compliance is being hindered by a lack of cooperation, which can't be going unnoticed. A determination of failure to comply doesn't require a formal investigation, right?
I don't disagree with the logic of your legal argument regarding equal treatment, but it doesn't seem to comport with the rules.
I hope you will try to answer my sloppy questions as directly as possible. I have much to learn and am trying to benefit from your experience.
And a Merry Christmas to You (and All) as well!
Please either provide a WORKING link or clean up the post so we can at least see the issuer's name.
Thank you.
ud,
Nah, don't think it's anything that tricky.....Pike probably just re-balancing portfolios for some reason. Bought and sold for $.04....that's why I put "sale" in quotes.
http://sec.gov/Archives/edgar/data/1201251/000101359409001678/xslF345X03/spongetechfm4-122409_ex.xml
Also slide down to Appendix 1 here:
http://sec.gov/Archives/edgar/data/1201251/000101359409001676/spongetech13d-122409.htm
Basically nets to a 3+m share net buy.....the reason for which is as unclear and surprising to me as the original position.
They had a private "sale" from one fund to another of 6m shares within pike.
And the phrase "non-derivative securities" just means the primary security....common stock.
spng is 3601970 I think.
That's right.
No, she didn't. Almost made me feel dopey for suggesting it.
The thing is, also on that website, one can merely enter the name Spongetech and get the file number that gave us the access that we had. They ASSUMED that the only people that would access that form were people that were either filing or amending that form.
I guess the state has their reasons for that, but the fact is, if they wanted to restrict access to those people, they could've just used the Federal ID# for access. As it is....and I just checked.....if one knows the company's Federal ID# they can go back and amend the filing right now without too much difficulty. Bet I could find it in maybe 20 minutes.
It's been frustrating. I'm inclined to think that, if they gave a s$^t, which they apparently don't, the easiest thing to do would be to restrict access to the form by using the Federal ID# or maybe doing something a little less complicated, like writing "The system is only set to file and/or amend annual franchise tax reports not to view previously filed annual reports" somewhere on the form itself.
NAAAAAH. Reminds me of "Badges......we don't need no stinkin' badges!"
tt,
Don't know if you read my chat, but you should sense my frustration. Delaware's website left it very easy to believe that SPNG didn't file for 2008 and, if you read carefully, doesn't feel that that situation needs clarifying.
Fortunately I have plenty of experience in being made a fool of and expect to get over it by Monday at the latest.
Ot, tt, pj.
Bottom line: I was wrong. SPNG's 2008 Franchise Taxes have been paid according to the state of Delaware....and they weren't $165,000.
Before you call me names and stuff, please go to https://delecorp.delaware.gov/eCorp/LoginAnnualReportsCLF and enter file#3601970 for the year 2008 and see what YOU think it says.
The following exchange represents my attempt to better understand what happened here, but it's probably not worth reading. Unless you wanna commiserate.
Tina: Hello, Please hold as I review your question.
(The first question, as OT noted, is never transcribed......it was basically "I have been told that Spongetech's 2008 Franchise Tax return was filed using the assumed par method, yet the filing on your website (link provided) shows the use of the authorized share method. Please explain."
Tina: Please allow me to transfer you to the Franchise Tax Department to assist you.
Tina: Is that ok?
Bob: absolutely.thanx
Tina: You are welcome.
Tina: One moment please
info: Please wait while I transfer the chat to the best suited site operator. Wait times depend on the number of people in the queue.
info: You are now chatting with 'Mazie' with the Delaware Division of Corporations Franchise Tax Section.
Mazie: Hello, Please hold as I review your question.
Mazie: If you log back in to the annual franchise tax report filing for tax year 2008, the system will reset the tax back to the authorized shares method. You cannot view previously filed reports on the web site
Bob: I'm looking at the filing right now..it shows as an authorized shares filing. And that's the source of my confusion. I was told that it was an assumed par filing but I'm not "seeing" that.
Mazie: You won't see it. The numbers used for the assumed par value capital method are not public information.
Bob: I see.......so what is the value of the filing that I'm looking at?
Mazie: That is the amount of tax based on the number of shares authorized
Bob: But, just so I'm clear, THAT ISN'T REAL INFORMATION?
Mazie: That is the information based on the authorized shares before it was recalculated on the assumed par value capital method
Bob: I see. Is there any indication on the website at all that would tell a reader that the information appearing there is not "real time" information. I'm afraid that I've been put in the awkward situation of providing it as such.
Mazie: No, other than it tells you that the report has been filed and that the information completed would be consider an amended report
Bob: Thanks Mazie.....hope you understand my confusion and that someone will see fit to clarify this someday.
Mazie: You're welcome. Sorry, there is nothing to clarify. The system is only set to file and/or amend annual franchise tax reports not to view previously filed annual reports. Anyone who wishes to obtain a copy of a previously filed annual franchise tax report would have to submit a written request and pay the required amount for the copy. However, the report would only provide the following information:
Mazie: • Telephone number
Mazie: • Principal Place of Business Address including street, city, state and zip code
Mazie: • Officer(s) title, name and address
Mazie: • Director(s) name and address
Mazie: • Total number of directors
Mazie: • Signature of authorized officer, address, date and title
Bob: " The system is only set to file and/or amend annual franchise tax reports not to view previously filed annual reports"
Bob: Now if only that statement appeared somewhere.
Mazie: Yes, the online filing is only available for the filing of and or for an annual franchise tax report to be amended.
Mazie: Please note that your Annual Report has already been filed for the Tax Year 2008.
Mazie: All information provided on the most current annual report on file will be replaced by filing this amended report.
Mazie: You must enter all data again when filing this amended report; in its corrected form.
Mazie: The above is the message that is provided when someone goes in under the file number after a report has been filed
Bob: Fine. BUT;
Bob: : All information provided on the most current annual report on file will be replaced by filing this amended report.
Mazie: Yes, therefore, the report is amended.
Bob: It currently indicates a Franchise Tax of $165,000, which would suggest that that is what it has been amended TO.
Mazie: No, the tax is reset to the authorized shares method so that the corporation can amend the number of shares issued and/or total gross assets if they were entered incorrectly the first time.
Bob: Thanks....good day.
Mazie: You're welcome.
Mazie: Is there anything else I can assist you with today?
Bob: Nope, I'm cooked. Merry Christmas!
Mazie: Okay. Merry Christmas.
Mazie: Thank you for contacting us online.
No, I'm not kidding. I'm trying to do some research.
"Hey, why don't you have a chat with the on line operator like I did, then report back to here what she told you."
Although I noticed that the initial question was somehow not reflected in your most recent chat while the conversation both preceding and following that question made it to your post without a problem, the reason I solicited your assistance in doing that was to provide the board with a post that came from someone with an established presence here. That, and you showed a willingness to engage them in conversation, having done so twice already today.
If you aren't interested in participating in determining whether the 2008 Franchise Tax filing that appears on the State of Delaware's website at the link provided is accurate please just say so and I'll contact them myself. Again, my reason for asking you to do so was so that folks like HappyGuy would be satisfied with the integrity of the response.
"loanranger and ttattletell, you're both wrong!..."
OT,
As I said, I expected that might be the case.......I've been wrong before and will be wrong again....not sure why you report the fact with such apparent glee!
If you don't mind, please re-contact Delaware and provide them the information that they asked for so that we can be sure that this is a closed issue:
They asked: "where on the internet did you see this information? "
The proper answer is:
https://delecorp.delaware.gov/eCorp/LoginAnnualReportsCLF
Using Spongetech's file #3601970 for the year 2008.
Perhaps you would like to look at it first to familiarize yourself with it. I look forward to their response.
I defer to your experience in these issues, but some things are still unclear to me regarding your view of what's going on. Let's start with the law:
I said: If I'm not mistaken, the only remaining recourse is a 12 month registration suspension or a complete revocation.
You responded: They cannot suspend trading for a year but there is a process in place for revoking registrations...
The 1934 Act says:
Section 12 -- Registration Requirements for Securities
Denial, suspension, or revocation of registration; notice and hearing
j. The Commission is authorized, by order, as it deems necessary or appropriate for the protection of investors to deny, to suspend the effective date of, to suspend for a period not exceeding twelve months, or to revoke the registration of a security, if the Commission finds, on the record after notice and opportunity for hearing, that the issuer, of such security has failed to comply with any provision of this title or the rules and regulations thereunder.
Now I'll grant you that I've never SEEN a 12 month registration suspension (no, not a trading suspension), but the rules clearly provide for one. I am also not at all clear on what the impact on shareholders might be of a registration suspension versus a trading suspension......are you?
I hope to get a chance to address the rest of your response in another post.
" Something doesn't add up here. Doesn't make sense that they would let SPNG go this long while still owing that kind of money."
O&T......
Completely agree. There is NO obvious reason for them not to have filed, which would have been using the proper method, resulting in a significantly lower tax. The idea that they would accept an extra ~$150,000 in tax liability for 2008 just to avoid disclosing o/s numbers as of 5/31/08 (when filed on 3/1/09) doesn't cut it. And it doesn't cut it for 2009 either, given that the filing itself, which would reflect the 5/31/09 o/s(whatever that is), isn't due for another couple months.......their only obligation for 2009 so far is for estimated payments.
I'm waiting for someone to tell me what we're missing.
OT,
In case my other post didn't make it clear:
You're right.....the company should have used the "Assumed Par Value Capital Method ". However, Delaware law says that if a company fails to provide the numbers required to calculate the tax based on that method, then the state will calculate the tax using the "Authorized Share Method".........which they are able to do because, as we all know, the share authorization changes are in their possession already. And it appears that, for 2008, that's what they did. And for 2009, they would appear to be preparing to do it again.
It's a lot easier than it looks.
Even though "the numbers" aren't available, plugging in any reasonable guesses regarding assets and o/s shares results in significantly lower tax amounts than the "authorized share method" that the state of Delaware uses if you don't do your own calculation or fail to provide them numbers to calculate with.
For frame of reference, using 722m o/s, 3B authorized and 22m assets generates a tax of $30,000+.
The state, using the authorized numbers that they KNOW, is calculating based on the A/S method, which results in the maximum tax for 2009 of $180,000. Which appears to be exactly what they did for y/e 2008.
Apparently nothing has been paid on the 2008 bill, which appears to be accruing interest, and estimates which were due on the 2009 bill are not reflected as having been paid on the statement either....although the filing itself is not yet due.
I'm sure that those who may be unfamiliar with what a 10K is appreciate the explanation.
"The only thing missing would be the audited financial records and, as I have previously stated, it is hard to imagine them wanting to pay auditors tens of thousands of dollars to help the SEC determine what was and wasn't true in the previously completed audits and in the various pump pieces they issued."
So you feel that it's not a case of a desire to withhold the financials but a conscious decision not to prepare them? And Robison has been sitting idly by since July at a discount, producing nothing? Yet is adequately occupied to avoid an 8K Item 4.01: Changes in Registrant's Certifying Accountant?
I have no experience in these matters, but after responding to the above, please tell me how silly it is for me to think that the SEC investigators would allow ongoing trading when an issuer under investigation not only fails to file, but shows no inclination to file. If I'm not mistaken, the only remaining recourse is a 12 month registration suspension or a complete revocation. What action on the part of the company, beyond showing an intent not to file, would be required for the Commission to take one of those actions?
Okay...next question then:
Could they subpoena all the pieces of the the 10K, financial and narrative, prior to its compilation?
If so, how's that different?
If not, why would they be precluded from doing that when (I presume) they can subpoena anything else that they feel necessary that might be lying around?
ps. Saw Morgan F on an old Just Shoot Me today....she could STILL handle my case anytime :o)
O-S,
Great post.
The distinction between documents and filings, which by their very name have been filed, is the meat of this issue. It leaves me with just one question:
Can a subpoena be issued which requires the submission of the unfiled 10K upon its preparation and prior to its filing?
This is such a wacky issue that I'll avoid any related questions until someone can definitively answer that one.
EDIT:
AHHrRRRRRGGGGHH, I'm editing this post because I can't figure out why they would do such a thing
nick,
I believe it is statement b), with a change in tense. It's tough to judge intent.
b) there is no audited 10k because SPNG does not choose to release one.
Dell has been brought up for comparison purposes due to their own SEC investigation and delayed filings of several years ago. While the issues are far from apples-to-apples, I thought you might find the following chronology interesting.
From an 8K filed on 8/17/06:
"ROUND ROCK, Texas--(BUSINESS WIRE)--Aug. 17, 2006--Dell
(NASDAQ:DELL) reported revenue of $14.1 billion for the second quarter of fiscal year 2007, an increase of 5 percent year-over-year."
The filing continued on in fine detail to provide the results for the quarter. It also included the following:
"In August 2005, Dell received notice from the U.S. Securities and Exchange Commission that it was conducting an informal(emphasis mine) investigation of the company. The notice stated that the investigation is not an indication that any violations of law have occurred. The SEC has requested information relating to revenue recognition and other accounting and financial reporting matters for certain past fiscal years, and Dell has been cooperating."
Yet, while they were explicit in their reporting of their results for the quarter on 8/17, they filed the following, including the quoted narrative on 9/14.....the due date of the 10Q FOR THAT QUARTER:
FORM 12b-25
NOTIFICATION OF LATE FILING
"As announced on September 11, 2006, Dell Inc. is delaying the filing of the Form 10-Q for its fiscal second quarter ended August 4, 2006. The company is unable to file because of questions raised in connection with the previously announced informal investigation by the U.S. Securities and Exchange Commission (“SEC”) into certain accounting and financial reporting matters, and the subsequently initiated independent investigation by the Audit Committee of its board of directors."
My reading of that, and that's all it is, is that Dell CHOSE not to file of its own volition and while the decision was made based on issues brought forth by the SEC, it was not dictated by them.
It's just a story and it probably wouldn't be a good idea to draw any definitive conclusions from it. But, at the same time, I seriously doubt that we'll be seeing any stories about the SEC REFUSING TO ALLOW a company to file a filing. If there are any such stories I hope whoever finds them will post one.
Good luck.
http://sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000826083&type=&dateb=&owner=exclude&start=160&count=40
ps. Curiosity items:
The 10Q in question was eventually filed on 10/30/07. The SEC investigation was ongoing at that point as a formal investigation (converted from informal in 10/06), but the internal Dell Audit Committee investigation was complete. The current Dell 10Q, filed on 12/3/09, says "Although the Audit Committee investigation has been completed, the SEC investigation is ongoing. Dell continues to cooperate with the SEC investigation." So it's three years and counting.
Share prices by date were/are:
08/17/06 22.80
09/15/06 21.35
10/30/07 29.80 (10/15-11/15 range of 28.18-26.83)
12/22/09 14.11
There is no deadline.
I was agreeing with you. Just providing a section of the rules that I thought you might find more appropriate since it dealt with companies versus brokers.
Hash,
Your citation relates to revocation of broker/dealer registrations, but the point remains the same for issuers:
Section 12 -- Registration Requirements for Securities
j. Denial, suspension, or revocation of registration; notice and hearing
The Commission is authorized, by order, as it deems necessary or appropriate for the protection of investors to deny, to suspend the effective date of, to suspend for a period not exceeding twelve months, or to revoke the registration of a security, if the Commission finds, on the record after notice and opportunity for hearing, that the issuer, of such security has failed to comply with any provision of this title or the rules and regulations thereunder. No member of a national securities exchange, broker, or dealer shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security the registration of which has been and is suspended or revoked pursuant to the preceding sentence.
k. Trading suspensions; emergency authority
1. Trading suspensions
If in its opinion the public interest and the protection of investors so require, the Commission is authorized by order--
1. summarily to suspend trading in any security (other than an exempted security) for a period not exceeding 10 business days, and
2. summarily to suspend all trading on any national securities exchange or otherwise, in securities other than exempted securities, for a period not exceeding 90 calendar days.
http://www.law.uc.edu/CCL/34Act/sec12.html
pj,
Preferred shares authorized, not issued (yet....at least not officially.....you telling us something?)
:O)
You're right. Asking the boat division sales personnel how to contact a golf division customer might very well produce misleading results (never heard of 'em!). However, the Dubai Exports & Imports website that I just looked at listed "Taylor Made Clubs". So the response from Rob in Sales at Taylormade-Adidas Golf would suggest that Hasher had reached the right person, no?
Anyway, my purpose was to indicate that his approach was practical and creative DD and I don't think that can be reasonably disputed. Everything we do can always be done a little bit better, right?
polsih,
Taylormade has been around for a long, long time.......I use some of their stuff (fenders mostly) on my boats. And for what it's worth I think that Hashers little project is what good DD is all about.
I didn't know that there was a loanranger on Hotstockmarket...if I had an attorney I'd get them right on that. And I don't know which of your so-called "haters" theories that I've debunked...I think some people just find it counter-intuitive to think that the powerful would willingly share their power and I agree with that. But I think I've explained that it wasn't by choice.
It wasn't meant to be a hint....I thought it was pretty direct.
Several folks commented on my interpretation of the phrase in the Articles of Incorporation governing the requirements for authorizing share increases, voicing their disagreement. I willingly admit that I don't have experience in the law...except for a few days in the cooler for a mis-step during my college years some 40 years ago....so I'm not surprised that my interpretation was rejected. It would be nice if there was some accompanying research but what the hell, I gave it a shot.
Hope you had the time to read my follow-up.
spit,
re: "concluded it was forced upon SPNG by the state of Delaware and was not voluntary".
Apologies if I left that impression. I did not mean to suggest that Delaware wrote their laws with SPNG in mind. But I believe they wrote the law requiring common shareholder class approval of any increase or decrease of authorized shares OF ITS CLASS to deal with a situation like SPNG's. They did not want a class of stock created that could dictate the authorized number of common shares without allowing the common shareholders to have a clear say in that decision. So SPNG's Articles are written to voluntarily comply with the law, but they really have no choice.
Please keep in mind that this is just my opinion from my reading of Delaware law and SPNG's Articles of Incorporation. So far no one agrees with it and I have no special skills in this area, so I can't say as I blames 'em.
Good Luck.
hasher, Kitt, TEX, anyone?
I suspect I that I should allow this to drop, but I can't.
While it seems obvious that the purpose for creating the Class B shares was to assure control, the wording of the authorization requirement is clear to me. I'm convinced that "voting separately as a class" means exactly what it says.
So, I too wondered why the "founders" would create a facility to control the company (Class B), and then seemingly give that control back by requiring the common and B shareholders to approve authorization changes separately. It seems that Delaware, in its wisdom, saw that allowing the creation of a separate voting class that was able to perpetuate itself without any recourse by the common shareholders might be a lousy arrangement. And I am reasonably certain that that is why they wrote the following law as they did (note that I have edited out inapplicable sections and highlighted what I saw as the high points):
TITLE 8
Corporations
CHAPTER 1. GENERAL CORPORATION LAW
Subchapter VIII. Amendment of Certificate of Incorporation; Changes in Capital and Capital Stock
§ 242. Amendment of certificate of incorporation after receipt of payment for stock; nonstock corporations.
(a) After a corporation has received payment for any of its capital stock, it may amend its certificate of incorporation, from time to time, in any and as many respects as may be desired, so long as its certificate of incorporation as amended would contain only such provisions as it would be lawful and proper to insert in an original certificate of incorporation filed at the time of the filing of the amendment; and, if a change in stock or the rights of stockholders, or an exchange, reclassification, subdivision, combination or cancellation of stock or rights of stockholders is to be made, such provisions as may be necessary to effect such change, exchange, reclassification, subdivision, combination or cancellation. In particular, and without limitation upon such general power of amendment, a corporation may amend its certificate of incorporation, from time to time, so as:
(3) To increase or decrease its authorized capital stock or to reclassify the same, by changing the number, par value, designations, preferences, or relative, participating, optional, or other special rights of the shares, or the qualifications, limitations or restrictions of such rights, or by changing shares with par value into shares without par value, or shares without par value into shares with par value either with or without increasing or decreasing the number of shares, or by subdividing or combining the outstanding shares of any class or series of a class of shares into a greater or lesser number of outstanding shares;
(b) Every amendment authorized by subsection (a) of this section shall be made and effected in the following manner:
(1) If the corporation has capital stock, its board of directors shall adopt a resolution setting forth the amendment proposed, declaring its advisability, and either calling a special meeting of the stockholders entitled to vote in respect thereof for the consideration of such amendment or directing that the amendment proposed be considered at the next annual meeting of the stockholders. Such special or annual meeting shall be called and held upon notice in accordance with § 222 of this title. The notice shall set forth such amendment in full or a brief summary of the changes to be effected thereby, as the directors shall deem advisable. At the meeting a vote of the stockholders entitled to vote thereon shall be taken for and against the proposed amendment. If a majority of the outstanding stock entitled to vote thereon, and a majority of the outstanding stock of each class entitled to vote thereon as a class has been voted in favor of the amendment, a certificate setting forth the amendment and certifying that such amendment has been duly adopted in accordance with this section shall be executed, acknowledged and filed and shall become effective in accordance with § 103 of this title.
(2) The holders of the outstanding shares of a class shall be entitled to vote as a class upon a proposed amendment, whether or not entitled to vote thereon by the certificate of incorporation, if the amendment would increase or decrease the aggregate number of authorized shares of such class, increase or decrease the par value of the shares of such class, or alter or change the powers, preferences, or special rights of the shares of such class so as to affect them adversely.
So, to no one's surprise, it seems that rather than the goodness of the founder's hearts it is the state of Delaware that is imposing the requirement of the approval of the majority of common shares, SEPARATELY, for any changes to their authorized number.
" before any TA is gagged the SEC has to approve this order because gagging the TA without the SEC's
consent would be in violation of the Freedom of Information Act. "
Malarky.
"It is not solely up to the company and Spongetech couldn't just tell the TA they are not allowed to say anything about the share structure"
Sure they can.
"Further, the SEC clearly states that in order for a TA to be gagged, a company must file Form "CT order" (which Spongetech did in 2008)"
More Malarkey. (There are no SEC rules that deal with the gagging of a T/A and the only 2008 CT order granted to SPNG dealt with the terms of the contracts with the Yankees and Mets.)
"the SEC will not allow the gag order unless the company clearly demonstrates that the gag order is "in the best interest of the public/shareholders" (taken directly from the SEC website)."
No, it's not. And you can look until you're blue in the face and you won't find it.
I'll continue if anybody is interested, but you should get the idea by now. Not only was this post copied and pasted from a previous post, but the original post was from June 16th, part of a larger post full of equally unsupportable nonsense.
I don't do "drifts". I do language. And there is only one way to interpret the following:
"the affirmative vote of a voting majority of the shares of the Common Stock and of a voting majority of the shares of the Class B Stock, each voting separately as a class."
and that is, that a change to Article IV of the Articles of Incorporation requires:
1. "the affirmative vote of a voting majority of the shares of the Common Stock"
AND
2. "a voting majority of the shares of the Class B Stock"
each voting separately as a class.
Both classes must agree, in separate elections, to authorize a change in Article IV. It's that simple.
The motivation of the parties to include those terms are for your to ruminate on.....I don't care. Whatever it was or whatever you would like to think that it was does not change the language.
If you have an alternate interpretation, please present it.
ps. "I dunno" is NOT an alternative interpretation.
"what would happen if the "A election" were pro, but the "B election" were con?"
Obviously the motion would fail.
z,
PIA? meaning?
h,
"Would the may 09 financials be correct if the previous (re-audited) ones were incorrect, or do these things work on a continuing basis?"
It's kind of a trick question. The only filing requiring re-audit is the 2008 10K, as you know. The SEC didn't want to see those numbers as comparison numbers on the 2009 10K without being reviewed first.
The 2009 10Q's were never audited, so they don't need a review in the SEC's eyes. And the 2008 10Q's were never audited either, so the comparables are no concern.
But you're right in that there must be continuity into the 2009 statements from the 2008 balance sheet.
Here's what I find interesting. In the event that Robison has completed the 2008 re-audit, and from a workload standpoint they sure should have, and they determined that Drakeford's work was acceptable (don't say it!), then there would be absolutely nothing precluding the company from publishing that fact. In fact, it could be argued that an 8-K to that effect would be required under the circumstances.
On the other hand, any changes that Robison deems necessary to the 2008 year end balance sheet would carry forward, having a domino like effect through the 2009 10Q's. And it would be reasonable to expect that those 4 (2008 and 2009x3)restatements might be filed as a group, with the 2009 10K filed subsequently. Of course, it remains to be seen whether we see any filings at all.