The Jailhouse

[CSykes]

SPNG $70M? I think I understand now..

I've been trying to wrap my head around these insane revenue numbers SPNG keeps putting out. From the recent PR..

SpongeTech® Delivery Systems, Inc. ("SpongeTech") “The Smarter Sponge™”, (OTCBB: SPNG - News) is pleased to announced that the Company has booked approximately $70 million in orders during the first quarter of FY ‘10; having another record month bringing in approximately $29 million in new orders for the month of August compared to July's orders of approximately $23.5 million.

I think I now understand why the company has such enormous revenue numbers, huge accounts receivable and keep paying hundreds of thousands of dollars on stock promotion.

The company is recording its shipments as revenue! This is a theory of mine as I find it extremely hard to believe retailers are paying for these sponges up front. My guess is part of they are only receiving payment AFTER a retailer has sold the goods. This would explain the huge accounts receivable. It would also explain the shady share structure issue and enormous stock promotion efforts. Since the company is filling the orders from retailers, it obviously has to manufacture the products. This cost money.. of which we know quite well from previous filings they don't have much of.

My prediction is that the 10K will show a substantial increase in the issued and outstanding. It will also show an increase in accounts receivable. I expect actual net profit to be negative based on cash flow if you separate money received through stock sales.

As for the individual who must be so concerned that they do searches for posts with "SPNG" then send people who write negative comments nasty PM's. It must really be tough being so paranoid about your investment huh?? I'll be looking forward to serving up a nice big plate of crow pie for your "moronic" ass.

FWIW.. out of curiosity I marked some boxes of the sponge tech boxes at my local Wallgreens with small X's using a sharpie. Those boxes are still sitting there (with dust on them now) several months later. SPNG can claim all the booked revenue they want.. but it is not in the bank until they sell them.