Hello fellow SPNGholders...been awhile since I posted, but I have kept up with a few of the posts and want to address a couple here (please pardon the length)...
First, with regard to Post # 258861 and its comment on A/R (Accounts Receivables).
- The post stated SPNG does not collect its receivables. First, we will look at SPNG last public filing, the Q3-10Q ending Feb 28, 2009 and compare it to the Q2-10Q ending Nov 30, 2008.
- In November 2008, revenue/sales for the six-month period was $17.9M, with A/R at $10.8M.
- In February 2009, rev/sales for nine-month period stood at $31M, with A/R at $14M.
- Quite impressive, actually, that sales increased by $14M in 3 months and A/R only rose $3.2M, meaning that during the course of Q3, $11M in sales had been converted to cash. There's not a company around that wouldn't love that A/R turnover quarter-over-quarter.
- International sales account for the high amount of A/R to sales prior to February, explaining the high ratio as international payment terms are typically in excess of 100 days. There may have also been a clause to not pay for the distributed items until sold, also not unusual for startup companies, as negotiating payment terms is not in the favor of startups. Then , as Walgreen's came on board, A/R began to be collected. This is why we see the $11M figure above. That is positive cash flow.
- This positive cash flow is what allowed SPNG to buyback the 500M shares from RME in April. Prior to this positive cash flow, RME (a private equity group owned by SPNG directors) provided working capital financing for 40% discounted shares (as mandated by the SEC), subsequently bought back at cost as A/R turned over.
- Couple this with the fact that internet and TV sales were just beginning at this time and it is easy to see how SPNG was able to purchase Dicon IN CASH, as those sales are instant cash and were in full swing in the summer. This is when I, and many others I know, made our purchases of SPNG products.
- If anyone has ever bought or sold on ebay, you also know that additional profit is made on S&H charges. All these facts completely fly in the face of bashers telling us that SPNG has no money. They are rolling in it and is how they are also able to afford the mass advertising.
- It is also easy to believe the $55M in sales for the fiscal year, as $24M for March-May would seem completely in line with internet and TV sales, along with other distribution channels being added (CVS, HSN, Costco, etc). And even easier to believe the $70M in orders June-August, the peak TV and internet sales, again INSTANT CASH...very nice.
Lastly, I would like to comment on the well-thought-out post by sponge digger # 258918...
- Of course mgmt is keeping sales and other figures close-to-the-chest right now. It would be insane to release sales and/or earnings figures in the middle of trying to get filings completed. It's just not done this way.
- They are keeping us updated on new advertising deals and remain very much in the public view.
- The fact PIKE has purchased 42M shares at roughly $1.7M AFTER being relegated to the grey market speaks volumes. Follow the money is no joke. It is real, and speculation has it that other institutional investors are lined up at the door waiting to see how things unfold.
- As far as NSS, it troubles me for naysayers to comment that we are assuming a large NSS position as speculative, then turn around and say one does not exist (see post #258788). I say it does, they say it doesn't. We will know soon enough, but suffice it to say that they are not here without a reason. We are on the grey sheets churning between .04 and .05, right? What reason is there to bash while on the greys, but for an NSS position?
- If there proves to be under 500M O/S, and we already know insiders and beneficial owners hold (I believe I saw in an earlier post) in excess of 360M, retail maybe 200M or so, and the 400M or so that AYME bought for someone*wink*, and that leaves AT LEAST half a billion counterfeit air shares (my guess is much higher). THAT would explain why we see naysayers still working on a stock churning on the grey market.
- Regarding AYME...why would someone continue to buy (always on the bid, so obviously buys) as MMs were trying to walk the price down? They could have simply allowed the price to drop and bought at the lower price. The only logical answer is that getting the lowest price was not the objective. Tying up and locking down the float was the objective...Mission Accomplished!!
- And of course filings...those pesky filings. As much as all of we shareholders would like to snap our fingers and have them completed, they must conform to SEC and FINRA demands and file them with every i dotted and t crossed. Form 3s and 4s are completed by directors. We might still see another Form 3 and/or 4, along with perhaps another filing explaining exactly who AYME was buying for. An MM must also file a 211 and have it approved by FINRA. Last, of course, are the 10Ks and current 10Q ending August 31, 2009. When will we see them filed? Well, in listening to the naysayers, never. I share a different opinion with fellow shareholders and believe all filings will become up-to-date in due time. When? I wish I knew, but have decided the best course is to continue to...follow the money.
That's it from me, good luck with your investment in SPNG.
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