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Projecting the sales:
$80,000 minimum royalty required @12%.
Sales based on min royalty = $666,666.
Contract expires 12/31/11.
"is that legal since we all know SPNG is not trading on the OTC?"
We don't ALL know that...it may be the sub-basement of the OTC, but it's still the OTC. The tricky part is leaving out the ".pk".
"OTC equity securities can be quoted on the Pink Quote system, and/or, if the securities are registered with the SEC and their issuers are current in their reporting obligation, on the OTCBB. Some OTC securities are not quoted on either the Pink Quote system or the OTCBB; these securities are sometimes referred to as grey market or "Other-OTC" securities."
http://www.pinksheets.com/pink/otcguide/investors_index.jsp
hasher,
I think you might be underestimating the man. Surely you remember from junior high science.......the earth's surface is 71% water. Do the math :o)
"The claims about Spongables selling under a Spongetech name or something like that is a different animal however"
No doubt a much stickier wicket. Even if supported by the facts I can't imagine how they'd measure the damages. But if Popovsky's market estimate is a reasonable indicator of Spongeables sales, and the damage to SPNG is valued as a portion of those Spongeable sales that "should" have been SPNG's, it ain't much.
From the original article, "Spongetech is all wet":
Michael Popovsky, CEO of LA-based sponge maker Spongeables, a SpongeTech rival, scoffs at the idea that a company that sells sponges with soap in them can generate $50 million in annual revenue.
"Impossible," he said. "Categorically not."
Those 3 words appear to be the entire case against Popovsky. No other quotes attributed to him appear in the article. The exact question to which he is responding and the person to whom he is responding may be assumed, but are not stated. I'm sure that it has been mentioned, but the case would require testimony from at least one member of the press.....something rarely provided even in less than critical cases.
Interesting distraction, not so sure about it being a great basis for a lawsuit. Even in the event that SPNG somehow establishes that their 2009 sales were or could have been $50 million, and that the statement was made in response to the implied question, I'm not convinced that the above 3 word OPINION is actionable.
"Committee of the Board of Directors
We have an audit committee composed of Frank Lazauskas."
He is the committee. As well as being the committee I suspect that he is also chairman of the committee.
From p.19 of:
http://sec.gov/Archives/edgar/data/1201251/000114420408050704/v125324_10ksb.htm
At the risk of being sighed at, allow me to point out that Rule 12h-3 would not appear to be the only rule under which a Form 15 can be filed:
http://sec.gov/about/forms/form15.pdf
And that those other rules might not require a company to become current prior to filing Form 15.
You decide. You may rest assured in any event that I haven't been "benighted"......fact is I'm afraid of the dark.
TEX,
They were bounced for the following reason (if you want dates and filings let me know).
As usual, from Rule 6530 (as you know, they were an otcbb issuers at the time):
(e)(1) Notwithstanding the foregoing paragraphs, a member shall not be permitted to quote a security if:
(A) while quoted on the OTCBB, the issuer of the security has failed to file a complete required annual or quarterly report by the due date for such report (including, if applicable, any extensions permitted by SEA Rule 12b-25) three times in the prior two-year period;
They had three strikes (two K's and a Q) and were bounced out.
NANA,
I think that IAUS is pink because they are a development stage company, not a late filer. So they don't get "strikes".
http://www.pinksheets.com/pink/quote/quote.jsp?symbol=iaus#getFilings
Click on the "Pink Sheets Current Information" logo.
Carpe,
What do you think that the SEC was referring to when they included the following in their suspension notice?:
......suspended trading in the securities of SpongeTech because of questions that have been raised about the accuracy and adequacy of publicly disseminated information concerning........investment agreements entered into by SpongeTech.............
pup,
Finally!
If every word on an unfiled 10K was copied and pasted onto a bunch of blank pieces of paper the SEC investigators would have access to them.
I admit that it took a while before I came to that realization. But I'm still not sure about the answer to the questions that I asked earlier. I'm revising them a bit for this post.
Assuming the 10K was completed, certified and signed:
Could the SEC require the company to delay the formal filing subject to their review? Would you expect the SEC to provide feedback to the company prior to filing? Could they impose changes prior to issuance, even after certification by Robison?
R,
"the point you are missing is that you DO NOT get any strikes when you are not quoted on the OTC:BB."
If only I had said it that well.
Thanks.
OT,
If I had any money left I'd bet that he's the CFO you listed, based on his "resume" on linkedin and:
http://www.istockanalyst.com/article/viewsecfiling/articleid/3114393
The other guys have unrelated backgrunds.
"I believe Kevin R. Arps is the CFO for Pike Capital Partners. Could he be affiliated with Skadden Arps?"
FWIW, a Google search for the following produced zero returns:
"kevin r. arps" "skadden arps"
igot,
I'm afraid that this is as far as I got:
"the common sense answer is yes...you people".........
The people that post here, myself included, do so as individuals. I have my own beliefs and understandings and, to the extent that some of them might be shared by others, that is as a result of coming to similar conclusions via independent thought processes. There is no "you people" here.
It's unfortunate that you chose to begin your post with such a condescending tone. It's one thing to express your opinion authoritatively, but if you really have something to offer you might show a little more respect for your audience.
I assume that you mean the PRIOR transfer agent? Do you know when agents were changed and if that was the last public info or is that info from the current agent that was "accidentally" made public?
OT,
No follow up on this?
"ask the schmuck if a company under formal sec investigation for possible fraud and having undergone suspension and relegated to the grey market could have their 10k reviewed at the request of investigators prior to it being filed...
or you could just use common sense..."
Igot.......What's the common sense answer? And if you feel it's "yes" (I assume it is.....otherwise why all the qualifiers), what purpose would it serve? Do you really think that the SEC would want to be responsible for a further filing delay? Would you expect the SEC to provide feedback to the company prior to filing? Could they impose changes prior to issuance, even after certification by Robison?
Seems to me that it would be a policy issue, but if you feel that it can be answered by common sense, do tell....what's the answer? If you think that it's "yes", please respond to the 3 questions above. I think our respective common senses might lead us to different conclusions.........and aren't common at all.
What's the ORIGINAL source of that?
"I just did a fast plug of all of the symbols into pink sheets .. none show any such trading companies? "
I went through this until I had a realization like the one that you're about to have:
They're no longer registered! That's why z's talking about 'em. And there's no OTC Market Tier called "No Longer Registered". :O)
All the companies that had MM's and were trading prior to revocation would have been found in your search right up until the minute they were revoked.
pup,
Again, per the 8-k of 10/2:
"If the Company does not request a hearing with a FINRA Hearing Officer, or file its Annual Report by October 16, 2009, it is anticipated that the Company’s shares of common stock will be delisted effective October 20, 2009 as set forth in the FINRA letter. On October 2, 2009, the Company requested an appeal hearing with a FINRA Hearing Officer. In addition, the Company and its auditors are using their best efforts to complete the audit and file the Annual Report by October 16, 2009."
http://sec.gov/Archives/edgar/data/1201251/000114420409051369/v161998_8k.htm
You're asking for an opinion, right?
I've never seen a SPNG PR or 8-K that wasn't worded as self-servingly as possible...and that's perfectly reasonable to expect. If I was them I would've said I requested a hearing too (notable requested the day the 8-k was issued). I probably would've said I requested a hearing, whether I did or not, because only someone familiar with 6530 would recognize the futility of it (remember: "The Hearing Officer will consider only the issues of whether the issuer’s security is then eligible for quotation in the Service and/or whether the issuer filed a complete report by the applicable due date taking into account any extensions pursuant to SEA Rule 12b-25.") Some folks/investors might've been convinced that more could be accomplished by that hearing than was really possible, right? Note the best efforts to complete.....by October 16 statement...they were just trying to make the best of a bad situation.
Note that the 8-K was filed 3 days before the suspension was issued. All I'm saying is that they were clearly unrelated......the FINRA and SEC issues are different issues. But it was a perfect storm of crap, for sure.
I don't really have anything to add to the 6530, so-called 3 strike, issue. If you want, I'll try to pull quotes from the rule in a sequence that makes more sense than the horrific sequence in which it is written.
I probably should point out that I have -0- legal background, read my first SEC filing about 2 years ago and there's a good chance that the stuff in my posts is stuff I found out about 8 seconds before I typed it. I try to be accurate, but....I'm no expert on anything.
z,
I agree with you. There should be a faster and more meaningful response to failure to files regardless of the reason for them. The link in my post will take you to many more examples of fanny-dragging by the SEC........in fact it appears that there's a conscious effort to play catch up. Which is better than NOT playing catch up.
But the fact that trading continues in stocks, some of which have not only not filed but also haven't sold anything in many moons, says just as much about the investing public as it does about a lax SEC.
It's not clear how this plays into the SPNG issues at this point. If they were able to get current in their filings and the SEC felt no action was necessary after their formal investigation it obviously wouldn't apply at all. My contribution to "all this talk about revoking SPNG" was precipitated by my desire to clarify, for myself, the issue of delisting versus revocation. That said, if the SEC were to be sincere about their duty to protect the investing public vis-a-vis nonfilers, one would think that their concern might emphasize companies that are trading at significant volumes....where the greatest potential "cost" is......versus those that have been dormant for years.
"there would have to be a hearing first"
Absolutely, and I wouldn't expect that to happen soon. I did a search at http://search.sec.gov/secgov/index.jsp using the litigation category, 1/1/2009-11/30/2009 in the date section and revocation as a search term and got 50 returns that gave an excellent perspective on this issue.
I know you didn't intend to confuse, but this subject took a beating yesterday and I wanted to try and avoid a repeat performance. If you had used the term "revocation" instead of "delisting" in the following sentence I wouldn't have made a peep.
"Rule 6530 deals with not being eligible for MM to quote a bid/ask, not about delisting".
Try this:
Rule 6530 deals with MM's not being eligible to quote a bid/ask due to otcbb delisting, not due to a revocation of registration by the SEC.
Yesterday was rough........hope this makes sense.
albus,
Believe me when I tell ya, confusion will arise from your use of the term "delisting" when you are referring to revocation of registration. They aren't the same.
spongeboy,
Your post is actually the footnote section from the following (please pardon the alignment):
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information with respect to beneficial ownership of our common stock as of the date of the prospectus by each stockholder known by us to be the beneficial owner of more than 5% of our common stock, each of our directors and executive officers and all executive officers and directors as a group.
Shares of Common Stock
Beneficially Owned(1)(2)
-----------------------
Name Title Number Percent
------------------ --------------- ----------- -------
RM Enterprises International,
Ltd. (3) 12,000,000 63.2%
1350 Broadway, Suite 210,
New York, New York 10018
Joel Pensley (4) 3,666,000 19.3%
211 Schoolhouse Road
Norfolk, CT 06058
Rubin Family Irrevocable
Stock Trust (5) 2,555,568 13.5%
25 Highland Boulevard
Dix Hills, New York 11746
Michael Metter (6) President -0- -0-%
One Tinker Lane and a Director
Greenwich, CT 06830
Steven Moskowitz (7) Secretary -0- -0-%
1350 Broadway, Suite 210, and a Director
New York, New York 10018
Jerome Schlanger 985,314 5.2%
Suite 307
414 Eagle Rock Avenue
West Orange New Jersey 07052
Frank Lazauskas (9) A Director 883,654 4.7%
51 Niagara Street
Newark, New Jersey 07105
Kenneth Hubbard (10) 985,314 5.2%
19 Booth Court
Millbrook, New York 12545
Carole Klein (11) 985,314 5.2%
18 Aspen Way
Morristown, New Jersey 07960
Thomas Monahan Treasurer and -0- -0-%
3638 Oxford Avenue Chief Financial
Riverdale, New York 10463 Officer
Colebrook, Inc. (12) 3,000,000 15.8%
25 Highland Boulevard
Dix Hills, New York 11746
Officers and Directors 883,654 4.7%
(4 persons)
The above, filed on 3/16/04, can be found at:
http://www.sec.gov/Archives/edgar/data/1201251/000126210604000025/0001262106-04-000025-index.htm
If there are any lawyers reading this maybe they can answer a question. I'm reasonably certain that a certifying accountant, or an employee thereof, cannot hold the shares of a publicly held client due to conflict of interest considerations. Does the legal profession have a similar rule? I see that Mr. Pensley appears to have been both attorney of record and a shareholder at the time of this filing.
TIA
This is makin' me nuts and "lol" ain't helping any :O)
1. Trading was suspended by the SEC effective 10/5 for 10 days:
"because of 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.
2. In accordance with Rule 6530(a)(2) ("the issuer of the security is required to file reports pursuant to Section 13 or 15(d) of the Exchange Act or the security is described in Section 12(g)(2)(B) of the Exchange Act, and, subject to a thirty calendar day grace period, the issuer of the security is current in its reporting obligations,") FINRA sent a letter saying "If the Company does not request a hearing with a FINRA Hearing Officer, or file its Annual Report by October 16, 2009, it is anticipated that the Company’s shares of common stock will be delisted effective October 20, 2009".
One thing had NOTHING to do with the other. The hearing, if there was a hearing, had NOTHING to do with either the suspension or the investigation.
I know I'm repeating my previous post but, again from 6530:
"The Hearing Officer will consider only the issues of whether the issuer's security is then eligible for quotation in the Service and/or whether the issuer filed a complete report by the applicable due date taking into account any extensions pursuant to SEA Rule 12b-25. The Hearing Officer shall not have discretion to grant any extensions of time for ineligible securities to become eligible."
Pup, Pilgrim, I am in 100% agreement that "the SEC still considers them to be a fully reporting company and are required to file the report according to the rules and policies of the SEC ". But that has absolutely NOTHING to do with the fact that the company has been delisted from OTCBB status. And based on that delisting can no longer be subject to FINRA rules. Hence Spongetch as of 10/20 CAN NO LONGER be subject to any rule that includes this term "(A) while quoted on the OTCBB, the issuer of the security has failed to file a complete required annual or quarterly report by the due date for such report (including, if applicable, any extensions permitted by SEA Rule 12b-25) three times in the prior two-year period;
To sum up.
This isn't right:
"they're no longer allowed to be quoted on the OTCBB and no longer considered an OTCBB listed company .. however, it was not because they failed to report ( they were just late ) .. it was because they were suspended"
This isn't clear:
"there is the 24 month time period .. and they would fall under the requirements as any other fully reporting company"
This didn't happen:
"the hearing covered more then one issue"
and this wasn't on the agenda:
"if the investigation was resolved at the hearing"
I agree with every last bit of the rest of your post..without reservation.
Here's hoping your bird isn't dry!
Please explain this:
"I see it as a fully reporting otcbb issuer"
in view of these excerpts from SPNG's own 8-K:
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
"The Company’s shares of common stock will not be eligible for continued quotation on the OTC Bulletin Board if the Company fails to comply with this requirement."
"If the Company does not request a hearing with a FINRA Hearing Officer, or file its Annual Report by October 16, 2009, it is anticipated that the Company’s shares of common stock will be delisted effective October 20, 2009 as set forth in the FINRA letter. "
BTW, IF they had a hearing they wouldn't have been spared the delisting based on:
"The Hearing Officer will consider only the issues of whether the issuer's security is then eligible for quotation in the Service and/or whether the issuer filed a complete report by the applicable due date taking into account any extensions pursuant to SEA Rule 12b-25. The Hearing Officer shall not have discretion to grant any extensions of time for ineligible securities to become eligible."
If they caught up on their filings tomorrow they could theoretically get an MM to File a Form 211 that would allow for "immediate" quotation if approved.
If they were currently in violation of Rule 6530 that would not be the case.
It's my opinion that they cannot violate the pertinent section(s) of Rule 6530 without being an OTCBB listed company, which I believe I have shown them not to be.
It is interesting.
Isn't that what I said?
Maybe I could've said it gooder.
SPNG not OTCBB any more. OTCBB rule not matter.
Happy Turkey Day!
legal,
re: "still registered as a fully reporting OTCBB"
As linked to the SPNG 8-K in my previous post:
" Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On September 25, 2009, Spongetech Delivery Systems, Inc. (the “Company”) received a letter from the Financial Industry Regulatory Authority (“FINRA”). The letter states that, pursuant to NASD Rule 6530, the Company is required to file with the Securities and Exchange Commission its Annual Report on Form 10-K for the year ended May 31, 2009 (the “Annual Report”) by no later than October 16, 2009. The Company’s shares of common stock will not be eligible for continued quotation on the OTC Bulletin Board if the Company fails to comply with this requirement. As previously disclosed, the Company is filing its Annual Report late because its former auditor, Drakeford & Drakeford, LLC, had its registration revoked by the Public Company Accounting Oversight Board.
If the Company does not request a hearing with a FINRA Hearing Officer, or file its Annual Report by October 16, 2009, it is anticipated that the Company’s shares of common stock will be delisted effective October 20, 2009 as set forth in the FINRA letter. On October 2, 2009, the Company requested an appeal hearing with a FINRA Hearing Officer. In addition, the Company and its auditors are using their best efforts to complete the audit and file the Annual Report by October 16, 2009.
pup,
The full text of Rule 6530 can be found here:
http://finra.complinet.com/en/display/display.html?rbid=2403&record_id=5607&element_id=4513&highlight=6530#r5607
But the answer to this issue is clearest in the first phrase of the OTCBB FAQ that you quote:
"Pursuant to NASD Rule 6530(e), any OTCBB issuer that is delinquent........"
SPNG stopped being an OTCBB issuer on or around 10/20.
http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=6826871-2967-4359&type=sect&dcn=0001144204-09-051369
The 10Q was due around 10/15, but not technically late until around 10/20, at which point the 30 day grace period (now passed) would have begun per the rule. That grace period ended last week. So the 10-K was the only delinquent filing as an OTCBB filer. It was their first strike, but the 10Q and any future delinquent filings would not be qualified as a second strike because they are no longer an "OTCBB issuer that is delinquent" and stopped being one on 10/20.
That's the way I see it anyway.
6530. OTCBB-Eligible Securities
http://finra.complinet.com/en/display/display.html?rbid=2403&record_id=5607&element_id=4513&highlight=6530#r5607
One is Spongeables, which I believe is the successor company to the original defendant, and the other is Popovsky.
p, I'm afraid that's not the way it works.
How about this math:
(Presented for example purposes only and without comment as to the accuracy of the numbers, reliability of the sources for them or the likelihood that they or any other numbers will ever be reported.)
Company has filed an SEC document approximating 2009 fiscal year earnings of $11,000,000.
Board members have opined an o/s share number of 2,500,000,000+.
I'm contributing the opinion that, if the company earned $11,000,000 on sales of $50,000,000, the marketplace based on those numbers alone would not hesitate to price the shares at a P/E of 20.
The above generates a pps of $.088.......not quite a double from here.
Debate's over, Tex.
I missed it completely and won anyway.
My only point was that to cite another poster as an authority, yours truly included, is never a great idea. And for some reason, it was a point he felt a need to prove.
Thank you Kitt.
I was nervous. If the issue was "Are there any filing requirements with the Pink Sheets?" he would've won the debate for sure :o)
"feel free to start the debate"
Thanks for the invite. If I'm proven to be mistaken you can rely on my apology.
Let's start with a link for this, please:
"Are there any filing requirements with the Pink Sheets for the issuers?
Issuers are not required to register securities with the Securities and Exchange Commission (SEC), or be current in their reporting requirements to be quoted on the Pink Sheets. Nor are issuers required to file financial or other company information with the Pink Sheets. SEC Rule 10b-17 requires all issuers of publicly traded securities, including Pink Sheets securities, to notify the NASD at least 10 calendar days prior to the record date of any dividend or other distribution, stock split, reverse split, or rights or subscription offering."
Your bolloxed issue is a different issue. Basically the 8-A filed in late September was to register under the Act and the Form 15, covered perfectly earlier by Pedro, would be required to undo that registration. And the requirements thereunder are simply either 1)less than 300 shareholders or 2)less than 500 shareholders AND less than $10 million in assets.
Please re-consider and research the following and your response to ABrowns earlier:
"As far as I can tell, *any* trading company is under '34 provisions, including its exemptions."
I'm quite certain that you are mistaken.
TEX,
No_BS is just a screen name. Actually I'm thinking about changing mine to Seriously_No_BS.
The 10Q, 10K and 8K are requirements of the 1934 Act. Do you think that issuers whose shares are not registered under the 1934 Act are required to file them?
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=43440932
TJG,
"your version of the SEC rules seem to apply to only one thing..posting miss information"
A little harsh for a guy who is wrong, no?
As I understand it, if there are no further quarterly 10Q or annual 10K filings, any transactions made by Pike would require 4's (a 3 is a one time deal) based on the 722 ad infinitum as long as the shares remain registered. So he would be required to file on any transaction up to and including one that drops him below 72 million.
As far as SM, MM and FL are concerned, their ownership percentage is not what requires their Form 4 filings..........it's their relationship to the company as officers/directors. Every transaction in SPNG stock from the date of their Form 3 filings forward has and will require a Form 4 filing as long as that relationship is intact.
ps. I still believe that RME owes a Form 3 to establish beneficial ownership based on their Class B holding and I can't get anyone to provide any reasoning to refute it. If someone shows an interest I'll link my argument.