Spongetech Delivery Systems, Inc. (fka SPNGQ)

[harvard homeboy]

<< It's TURE!!! SpongeTech is Soaking Up Sales!!!!!!!!!!!! >>


No, that's inaccurate. Spongetech recognizes sales when the orders are shipped, not when the order is booked. (See the most recent 10-Q to confirm that, if you think that's incorrect).

There's a difference insofar as revenue recognition goes. And since the only currency Spongetech has is its stock, which it uses to pay the company executives, the company consultants, the company lawyers, the company PR firms, etc., it's fair to suggest that the company needs to build inventory before it can be shipped (and therefore booked as sales revenues) and they're also going to need to have a warehouse to accommodate all the returns they're going to get, which will take some cash as well.

All of those things require cash, which as of Feb 28, Spongetech had in short supply.