Spongetech Delivery Systems, Inc. (fka SPNGQ)

[overachiever]

No, not really. Spongetech is in the business of selling sponges, not stock. That's why you want to know how much cash the company is generating from its normal, ongoing, daily business activities. And that's why the $9.7 M belongs in a different section of the cash flow statement. It just helps you as an investor to understand how the company is faring as an ongoing economic entity.

And by the way, I think this particular misstatement was intentional, since one of the other companies that Moskowitz runs -- the little mom-and-pop modeling agency he runs that's also publicly-held -- actually got the cash flow stuff right in their most recent set of financial statements, though that's another discussion.


Excellent points. You have easily stumbled onto the crux of the matter--that Slick Trick Moskowitz has set this up as a stock dumping vehicle first and foremost. The cash flow comes from stock sale arrangements, the advertising venues are primarily being used for stock sales (CNBC, Fox Financial, Baseball Park ads with the stock symbol displayed prominently within the ad), etc.

Most interesting to me will be how the new auditing firm treats the footnoted customer base which has accounted for 99.4% of total sales as well as the footnoted sales distribution in Europe (22%), Russia (18%), Asia and Latin America (11%).

The footnoted customer list is primarily comprised of a non-descript group of "no names" which have no footprint anywhere. SPNG has spent a small fortune advertising in the USA, yet claims that only 28% of its total sales are in North America with the bulk of the company's business being done in places like Europe and Russia where no one can ever find any sponges offered for sale at all. Even the company's official IR can't tell us where one can buy a spongetech sponge in Europe, for example.

Moskowitz seems to be gambling that he can drive this company from point A to point B using what appear to be very questionable and illegal methods and that the ends will justify the means. My guess is that he will fail and all will be exposed well before he is home free.