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"I doubt there's a way to structure two elections."
In that case, I welcome you or anyone else to clearly interpret the following phrase any other way:
"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."
H,
A belated thank you. I knew you weren't referring to my numbers, I was just saying that the share raises weren't arbitrary in the sense that they had a very real purpose.
I guess I shouldn't be surprised that my post didn't draw more attention. I think your efforts to find out if companies of substance can tell you how to contact their distributors is a terrific project. Just one suggestion if I may......when you report the responses, please consider posting your original inquiry with each one. I think the wording of your question might make it easier for people (me) to follow the responses without having to know the history of the issue.
GL
happy,
From your link I see that 7 (maybe not coincidentally) of the 60+ companies that were suspended, were suspended individually, with the remainder being suspended in batches of 6 or more.
I'm guessing here, but I believe the group suspensions represent an ongoing SEC program to clear the decks of companies that have basically stopped operations and trading on their own.....next stop being revocation of registration.
The companies suspended individually, on the other hand, were probably suspended "for cause", where the absence of activity is not the SEC's primary reason for acting. It would be interesting to know if the latter group is the same 7 that were still breathing after suspension.
As noted, most of the above is conjecture, a product of both boredom and laziness.
"Arbitrarily" isn't the term that I would use, but ok.
What I am suggesting is that the size of the RME holding for those previous raises (I didn't doublecheck your count of 4, but I don't question it) was adequate so that, when added to the other holdings of MMSMFL, it resulted in a majority of the outstanding shares at the time of those elections.
For example:
At year end 8/31/08, per the 10K, holdings were as follows (millions, rounded):
MMSMFL 25
RME 257
Total O/S common shares 521
(Note that the individual ownership above is actually as of 7/28....this is for example purposes only and exact comparable data by date is tough to come by).
So, the common share election could result in a majority of all shareholders (54%) without even asking for the votes of any other than MMSMFL.
"(b) The provisions of this Article IV of the Certificate of Incorporation shall not be modified, revised, altered or amended, repealed or rescinded in whole or in part, without 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."
It's my understanding that the last 6 words of the term deal with your question. I interpret it to mean that there are effectively 2 elections required under Article IV. One for the common shares, as discussed, and another for the Class B shares. And that, in order to modify, revise, etc. BOTH elections must result in majorities in favor thereof. So the Class B election, which is clearly a shoe-in, must be supplemented by a Common share election in order to change Article IV. That's why the low RME holding caught my interest as having a significant potential impact on this issue at this time.
I'm not an expert in this stuff...or anything else.....and am drawing my conclusions based only on my reading of the clause above. I sure could have it wrong, but I don't think so.
Hasher,
re: "It would not surprise me to see an increase in the AS to be announced soon."
Food for thought:
The article amending the Certificate of Incorporation on 9/25 said the following:
2. The Certificate of Incorporation of this Corporation shall be amended by changing the Article thereof numbered “FOURTH” so that, as amended, said Article shall be and read as follows:
"ARTICLE IV. CAPITAL STOCK.
The aggregate number of shares of stock of all classes which the Corporation shall have authority to issue is 3,068,000,000, consisting of 3,000,000,000 shares of Common Stock, having a par value of $0.001 per share, 28,000,000 shares of Class B Stock, having a par value of $0.001 per share, and 40,000,000 shares of Preferred Stock, having a par value of $0.001 per share."
It also said, and this appears in all prior amendments:
"(b) The provisions of this Article IV of the Certificate of Incorporation shall not be modified, revised, altered or amended, repealed or rescinded in whole or in part, without 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."
I believe that the above provision is the term that has been relied upon to raise the authorized share level in each of the previous instances. Obviously there has been very little difficulty in achieving a majority in the Class B elections, but I wonder what, if anything the Form 3's that were filed showing holdings as of 4 days subsequent to the above filing might suggest regarding the Common Stock election that would be required for any authorized share changes, up or down.
Excuse the abbreviations, rounded to millions:
MM 11+9 (common+class B)
SM 6+9
FL 28+5
RME 66+5
So, the total common shares beneficially owned (suggesting probably under the control of for voting purposes) as of 9/28/09 was 111 million. The officers should have filed Form 4's if they had any subsequent transactions.....I would have expected a Form 3 for RME (based on their Class B holding) and Form 4's for subsequent transactions, but that's just my opinion.
Based solely on the above, if there are more than a total of 222 million shares outstanding and if there have not been any increases in the holdings reported as of 9/28, the 3 directors cannot authorize an increase or decrease in authorized shares by themselves.....without soliciting the votes of all shareholders.
Those are 2 very big ifs and as I said, this is just food for thought.
By the way, Pike indicated ownership at that date of 100 million plus 42 million added later. And we don't know the status of the Signature and Levin(sp?) holdings, but I can't imagine that their shares could participate in a vote without a notification to ALL shareholders.
veg,
The rules require the auditor to report evidence of fraud to the client, then to the SEC if not corrected OR directly to the SEC who has no obligation to make it public immediately. The fact that we have heard nothing means exactly that.....nothing.
veg,
p.F9 of same 10Q
Revenue Recognition
Sales and services are recorded when products are delivered to the customers. Provision for discounts, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. In instances where products are configured to customer requirements, revenue is recorded upon the successful completion of the Company’s final test procedures. For the nine months ended February 28, 2009, six customers, SA Trading Company, US Asia Trading, Dubai Export Import Company, Fesco Sales Corp., New Century Media and Walgreens, accounted for 99.4 percent of sales.
http://sec.gov/Archives/edgar/data/1201251/000114420409021409/v146656_10q.htm
TJG,
I re-read your post and I respect your right to express your opinion.
My response was not to that opinion, but to the fact that it was rendered based on a hypothetical that wasn't supported by any facts.
There is no way for me to argue sensibly with your opinion without guessing about how the settlement came about and I'll leave that to you. But it seems as likely that a settlement was reached by Spongetech to avoid having to support their sales numbers as it was by Spongables to avoid suffering monetary damages. And they both were probably motivated by a desire to cut legal fees. It's over and I'll bet both parties are happy to see it go.
TJG,
"just for argument sake lets say it went to court"
"remember if it would have gone to court"
It went to court. The settlement was made in court and the "with prejudice" determination was made by the court.
As to whose idea it was to settle, it was everybody's. They agreed not to use each other's nomenclature and Popovsky agreed to mumble apologetically, which will have no meaning if it goes unmentioned in the Post, which it so far has. The best thing to come out of it for all parties is its relatively painless and hasty conclusion.
bucks,
I'd rather not express an opinion that might be interpreted as advice, but I have a few thoughts based on a little experience and a fair amount of research:
Thinking of an SEC investigation as a criminal investigation probably isn't apples-to-apples. So, what a prosecutor might do in terms of filing charges based on evidence gathered may not be the same thing that the SEC might do in a similar situation. The SEC process usually starts with an informal investigation (about which we have not heard) and proceeds to a formal investigation of undetermined duration......I don't think they sense any time pressure at all that would cause them to stop before ALL potential fraudulent activities were thoroughly investigated in order to "bring forth their case" as it related to completed components.
If memory serves, the formal investigation notification was delivered on 9/18. The Commission felt that it was in the interest of current and potential shareholders to suspend trading 2 weeks later, for reasons stated, which would suggest TO ME that they definitely didn't begin the investigation "a bit prematurely". Finally, at the suggestion of another poster, I looked into the recovery rates of companies that have undergone suspensions...my research indicated that they were poor. You might want to do the same to see if you concur....I found everything I needed searching sec.gov.
Then again, your guess is as good as mine.
No problem, outfer.
Note that neither I nor the court offers up a comment on the relative value of the settlements to the parties, naturally. But if that little voice is really telling you that there wasn't a lot of it gained in either exercise, that wouldn't surprise me at all.
Good Luck
Outfer,
You've got the concept right.......the court says that the case(s) can't be brought again. But that shouldn't be viewed negatively here.
Each case is brought based on a complaint related to a given set of facts. These cases were settled (in court, not out of) as to the complaints brought, hence dismissed with prejudice. Nothing precludes SPNG from bringing a new complaint against Spongables should they re-introduce the name "Spongetech" to their website or use any of the terms that they agreed not to use in the original settlement. The term "with prejudice would have the negative implication that you "sense" if the case had been dismissed by the court after a finding that the facts did not support the complaint.
Same deal with GFGU. They AGREED to settle, so the judge basically said "there's no need to do this again as long as you guys agree on this settlement".
hasher,
FYI, here's a sample of a "forged" opinion letter:
http://stockscamarchive.110mb.com/spngscam.pdf
I just realized that when that letter was written (4/17), one might have expected Pensley's letterhead to look like this:
http://spngscam.angelfire.com/pensley.pdf
And it also just struck me that the JP/MA partnership agreement (can't find the link right now) showed only one "current client" as of the agreement date (3/31) and it wasn't Spongetech.
I'm sorry for being so obtuse.
It was not clear to me from your previous posts that you were stating, without any equivocation, that David Patch told you that he directed Kaja Whitehouse to write the initial NY Post article. And I was unaware that that had been discussed between you and he on this board previously. That is now crystal clear to me and I apologize to you and to anyone who may have been left with the impression that you were leaving anything unsaid. It's unfortunate that all that history has gone "poof"
Thanks.
ps. Still don't know what "ubss" means?
4k9p,
Thanks much for your response. I'm afraid that I don't have PM and so cannot respond in kind. I'm too cheap.
But there's a second reason:
The PM doesn't exactly comport with "all i know is what i posted earlier". I don't want to seem ungrateful for the communication in question, but I'm now in the awkward position of keeping a confidence that I don't want regarding an issue that you contend has been made public in the past.
Please consider making the statement that you made to me here, where people can evaluate its credibility for themselves. If, as you say, it has been discussed and acknowledged on the board previously, then no harm no foul. I won't ask twice and I'll not divulge info received in a PM.
ps. What's ubss?
4k9p,
Did DP ever publicly acknowledge (or deny) making that statement to you? If so, can you point me to that, please?
Also, I have not seen any indication that an informal investigation preceded the formal investigation, yet I believe that to be the norm. While it would be unusual for such a thing to be made public, it would be no less unusual than someone directing a reporter to write an article about a company under informal investigation and that fact being reported to David Patch who then reported it to you. Were you made aware at any point that an informal investigation occurred?
Who wanted to see the article in the Post? Given that the first article appeared after the auditor and late filing issues had already sent the stock down significantly, what would the motivation have been for that party to pile on? Was it to create a shorting opportunity or a buying opportunity or both?
Does the sum of your information begin and end with your statement that "i was told by DP that kaja was directed to write that first article"?
I'm not a big fan of coincidence either. Or conjecture, for that matter.
I stand corrected. By me.
The FIRST Post article was on 9/17 (Not Spongeworthy...
SpongeTech mops up books amid SEC inquiry), the day before the company received the formal order of investigation.
The likelihood of that article being the precipitant for the investigation is just as silly, but I was mistaken in my previous post.
The real timeline:
It's true that SPNG filed the 8-K reporting the SEC investigation on 9/25, after the "Spongetech is all wet" article was published on 9/22. But they filed late and the filing actually reported:
"On September 18, 2009, the Company received a formal order of investigation issued by the SEC regarding possible securities laws violations by the Company and/or other persons."
So the idea that the SEC relied on the Post article as a pretense to investigate isn't just illogical, it's wrong.
Risi,
Apparently I was reacting to a different NXgen.
NXgen Holdings was the previous name of Green Bridge.
The original SB-2 registration statement of Spongetech refers to Nexgen Acquisitions, which later changed its name to Spongetech.
"We are a Delaware corporation which, under the name Nexgen Acquisitions VIII, Inc., on July 15, 2002, entered into a stock purchase agreement with RSI Enterprises, Inc., a New York corporation, and its sole stockholder, RM Enterprises International, Inc. We were not engaged in any business prior to the acquisition of RSI. The acquisition agreement provided that RM transfer the capital stock of RSI for 12,000,000 shares of our common stock. On October 4, 2002, RSI amended its certificate of incorporation to change its name to Spongetech International Ltd. On October 9, 2002, we changed our name to Spongetech Delivery Systems, Inc."
Guess it's just a happy coincidence.
Just for the record, I wasn't promoting it...just reporting it.
And the name NXgen (Green Bridge "relative") has an unpleasant familiar ring to it.
Wowgreen International, LLC to Acquire Majority Control of Green Bridge Industries, Inc.
http://finance.yahoo.com/news/Wowgreen-International-LLC-to-prnews-3887258500.html?x=0&.v=1
May I humbly suggest that you re-read both my posts and your own.
I didn't say "If they file", you did. I was quoting YOU.
And you just said it again. And within a millisecond of saying "there is no if".
Listen carefully:
I know that they will be revoked if they do not file. I don't need you to tell me that over and over and over again.....I didn't need you to tell me that the first time.
My only point in addressing the R/S issue that YOU brought up by suggesting that it would be the likely result "If they file" was to suggest that that would be a better result for shareholders than revocation.
If you have anything new to add please add it. If you would like to refute anything I said by all means do so. If you can do so without the mantra I'd appreciate it. And if you can point out exactly what I said that has you disagreeing with me on points that we agree on, I'd appreciate that, too.
panther,
I don't disagree with any of that. In the absence of the 2 following statements I wouldn't have posted at all:
pup: well if they do file- the R/S will be hot and heavy .. either way the shareholders get creamed
panth: If the 10K is filed, the share holders face the promised Reverse Split.
You guys had not entertained the "if" prospect at all recently and I couldn't let it just slide on by without a comment about the potential "then".
"So the answer is FOIA is nott going to get you anywhere on the SPNG 10-K or missing 10-Qs."
That's for sure.
The SEC does respond to SOME FOIA requests:
http://www.sec.gov/foia/arfoia08.pdf
But a 10-K filing that hasn't been filed isn't on the list.
"anything is better than being Revoked "
I was TRYING to say exactly that, but without being quite so direct :O)
Just for the sake of discussion.
I think that as time marches on the likelihood of filings goes down and I rarely disagree with the quoted posters, but I've taken these statements out of context as an excuse to bring up the subject that follows them:
pup: well if they do file - the R/S will be hot and heavy .. either way the shareholders get creamed
panth: If the 10K is filed, the share holders face the promised Reverse Split.
pup: (in response to "They will get back on the pinks.")
only if they file and hook up the MM 2-11 .. and the promised R/S will come and followed with huge dilution' because they raised the A/S to 3 billion ..
panth: Just how can they get back on the pinks? Not a chance ...
XXXXXXXXXXXX
Escape from the grey cellar requires that the company file. If they do, and if the financials don't conform to the original 2008 filing and the 2009 estimates as reported on the NT10K (50rev & 11net) it's probably safe to assume that the stock will trade somewhere south of the current .04-.05. It appears that you guys would expect a reverse split in those circumstances and that wouldn't surprise me either. The thing is, a reverse split is not a death sentence. While the majority of stocks DO drift down after a reverse split, they all don't.....after all, it's a proportional redistribution of share price and share count with no effect whatsoever on the financial condition of the company. The only reason for the general post-split downtrend is a function of the nature of the companies themselves and their prospects. So, while getting "back on the pinks" and having to do a reverse split may not be peaches and cream, it may be the last hope for longs to recoup funds and re-evaluate prospects.
No Filings, No Peace. Say it!
cj,
DP's words represent his own conclusions.....SPNG 8K'ed the formal investigation and at that point no knowledgable investor should have been "surprised if the stock was halted". So it may have been bad form for an SEC official to say so, but it wouldn't have been newsworthy.
I don't think it would be unreasonable at this point for an official to say "Don't be surprised if the registration is revoked". It wouldn't be very responsible, but it wouldn't carry the same weight as "disclosed non-public information about an upcoming investigation, and probable suspension" either and that is what I was responding to.
I believe the GFGU thing, on the other hand, represented a written communication to Patch that DOES fit your characterization. Has nothing to do with SPNG's problems, though.
GL
It's nonsense, based on the estimated income number, and explained away later in the thread.
"And yes, for the SEC to have disclosed non-public information about an upcoming investigation, and probable suspension as well, is more than a little unfair."
What? That didn't happen.
May: Pensley writes to SEC regarding opinion letters he says he hasn't signed.
June: Per the "new" suit, the Pensley-Abato partnership becomes "dysfunctional" (my term...see the complaint).
September: Abato talks to Post, supporting Pensley's contention regarding the letters.***
November: Pensley files against Abato and Old Monmouth to prevent the "conversion" (again, my term) of the Proteonomix shares.
***Per the Post article:
"Abato said that after learning about the documents, their firm, Pensley & Abato, sent a cease-and-desist letter to SpongeTech. She said SpongeTech CFO Steve Moskowitz claimed the company had authority to use the law firm's name in the legal documents, but agreed to stop."
http://www.nypost.com/p/news/business/spongetech_is_all_wet_hBMpyldSkFZez0wuxFdupO
Has anyone seen either the cease-and-desist letter or SM's response anywhere?
Believe it or not, it has absolutely nothing to do with Spongetech. Directly.
Kitt,
"I don't agree the spongetech product is a natural".
Hard to believe that you don't think the character Spongebob isn't a natural for a soap-filled sponge.
You're welcome, Kitt.
I have to confess that I've never seen the Spongebob sponge up close, but a high res image on Google images suggests that it's maybe a 1/4" relief off the surface of the sponge. But the product's more or less a natural, so the packaging sells it well enough. Spiderman, in the absence of multiple colors, has gotta be a tougher nut. And I suspect that you're right about "just don't make no crappy looking spidey.!!!"
Find one example of a company being restored to the otcbb without achieving compliance in their filings. ONE(1). Should be easy, no?
Gotta be a lot easier than trying to convince me that your theory is sound without providing a single fact to support it. After all, "there are no doubt precedents all over the place".
I suppose it might be harder to confirm that a company has had their share price stabilized in order to absorb an nss position with the help of the SEC..for the benefit of the SEC. And it's precisely that difficulty that allows you to put forth such stuff.
Smoke and mirrors.
I have no more desire to try and find an example of a deal that has never been, and can't be, made than I do to try to find a needle in a haystack in which there is no needle.
The only purpose of my post was to establish that YOU couldn't provide an example of your proposed deal....you know, the one where the SEC helps the company avoid its own regulations. I suspect that you have the same staggering list of examples of companies that have successfully come to agreements with the SEC and the naked short community to manage their share prices.
This stuff may be common sense to you, but it doesn't pass a sniff test. People that consider these concepts should be made aware that they have no precedent. And that such innovative manipulation of the regulatory authorities probably shouldn't be expected of a company that claims a soapy sponge as its technological breakthrough.
The only step that the company can take that is in the interest of the shareholders is to get current in their filings. Anything else is smoke and mirrors.
"you dont think the sec could get spng back on the otcbb
by tomorrow if they so desired?...even without a 15c-211?..is that what you think?.."
It's what I think. Got an example of it happening before or would this be the first time?
dog,
Good stuff.
Just in case (ha!) some folks might not want to take the time to click through, the following is from a paper published by a major law firm entitled "SEC Enforcement – What Chief Legal Officers of SEC
Reporting Companies Should be Focused On".
"The auditors have their own duties in the event they discover material fraud in the course of an
audit. They are under duties to report to management and the audit committee. If, after informing the
audit committee, the auditors conclude that the company has not taken “timely and appropriate remedial action” they must report up to the board. Upon receiving such a report, the board has one business day to report to the SEC, failing which the auditors must resign and report, or just report, the matter to the SEC."
Just a couple points.
This interpretation obligates the auditor to define "material fraud".....an issue of law and intent versus "mere" improper accounting. By taking the indicated action by resigning and making the issue a public one they expose themselves to legal recourse by the client, so they need to be extremely certain of their position. They presumably can escape that jeopardy by taking the "or just report" option....it's not clear to me whether, should they choose that option, either the client or the shareholders would ever hear about it. In which case the "fact" that Robison is still in place may not be all that telling.
For the record, in this case once the auditors report to management and the audit committee they have already reported "up to the board".
NaNA,
You better explain it to me again, too. No matter how many times it's explained to me I just don't get it.
Securities Exchange Act of 1934
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.
Kitt,
Am I missing something here?
"No one knows how much more money it really costs spng for a marvel license. That figure of 25,000 was quoted by another poster and repeated on and on. Even if it comes from marvel, there's most likely more fees as well..."
This isn't a PR, it's a License Agreement, signed by the parties.
http://www.sec.gov/Archives/edgar/data/1201251/000114420409063031/v168199_ex10-1.htm
Whether there will be sales flowing form it may be a separate question, but there can be no question that there's an agreement with specific terms that dictate pricing.