Spongetech Delivery Systems, Inc. (fka SPNGQ)

[printmail01]

wadirum1> In reply to your question/post > PLEASE READ THE 10 > IT IS NOT CLEAR AT ALL >

Per the filing it appears SPNG is listing $11 million of "purchase" orders as sales and Accounts receiveable.(?) I cant get IR to answer the question on phone or email , I just sent another email , will call him again tomorrow and ask again.

IMO the A/R and sales disclosure in this filing are very deceptive and not at all clear, When the product SHIPS and or you collect the monies you list the sale, Yes? IMPO listing "purchase orders" as sales and accounts receiveable before you produce THE ENTIRE order and or ship the entire order and or get paid for the entire order , for ALL of the product is deceptive....

IMO it appears they completed the "final test procedures" and got final approval for the 2 new sponges and then listed a years worth of Purchase orders as a sale? NOT CLEAR at all......

Per the filing:
Revenues

To date we have received purchase orders of $4.7 million for Puddle Pal’s Children’s Sponge products and $6.4 million for Uncle Norman’s Pet Sponge products.

7. 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 six months ended November 30, 2008, three customers, SA Trading Company, Dubai Export Import Company and New Century Media, accounted for 82.9 percent of sales.

http://www.sec.gov/Archives/edgar/data/1201251/000114420409002030/v137081_10q.htm


Ask yourself > Are not ALL products: "configured to customer requirements"

How much of SPNG sales revenues and A/R are booked when " products are delivered to the customers" and how much is booked when "In instances where products are configured to customer requirements, revenue is recorded upon the successful completion of the Company’s final test procedures." Why NOT disclose exactly how much revenue and A/R is booked for each catagory and why not diclose exactly why they have this verbiage in the filing and what odes it mean?

Also ask yourself why under "revenues" do they list 2 LARGE Purchase orders? Are they claiming these orders are completed, sent out , paid for? Or are they a years worth of work that will sent out thru the year? Why NOT diclose why they are listing Purchase Orders under revenues in the filing?

IMPO this is VERY deceptive.