Spongetech Delivery Systems, Inc. (fka SPNGQ)

[loanranger]

Why the change from 13G to 13D?

There's a line in the heading of the form that says:
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box .x

Rule 13d-1 -- Filing of Schedules 13D-G can be found here in its entirety:
http://www.law.uc.edu/CCL/34ActRls/rule13d-1.html

The first possible reason is that the filer has gone from having "acquired such securities in the ordinary course of his business" to "holding the securities with a purpose or effect of changing or influencing control of the issuer, or in connection with or as a participant in any transaction having that purpose or effect".
240.13d-1(e) says the change is required if the "person":
i. Has acquired or holds the securities with a purpose or effect of changing or influencing control of the issuer, or in connection with or as a participant in any transaction having that purpose or effect, including any transaction subject to Rule 13d-3(b); and
ii. Is at that time the beneficial owner of more than five percent of a class of equity securities described in Rule 13d-1(i).

The second possible reason is that the filers position has increased to in excess of 20%.
240.13d-1(f) says the filer "shall file a statement on Schedule 13D within 10 days of the date on which, the person's beneficial ownership equals or exceeds 20 percent of the class of equity securities."

The third possible reason is if the filer no longer qualifies to file Form 13G because they no longer are in a category of investors that allows the use of the shortened 13G format, which permits the exclusion of certain information that the 13D requires.
240.13d-1(g) "Any person who has reported an acquisition of securities in a statement on Schedule 13G pursuant to paragraph (b) of this section, or has become obligated to report on the Schedule 13G but has not yet filed the Schedule, and thereafter ceases to be a person specified in paragraph (b)(1)(ii) of this section ......"

So, the first reason is possible, but we have no concrete evidence of a change in Pike's intent.
The second reason REQUIRES the change to the 13D. However, reason#1 doesn't get eliminated by that fact.
The third reason doesn't apply...there have been no changes in capacity of any of the Pike parties according to the form, so that wouldn't have anything to do with the form change.


Nobody's asking, but I'm inclined to think that the form change was merely predicated upon the increase in ownership beyond 20%....to 20.1%.
If you follow this type of filing you'll notice a tendency of holders to buy up to 5.1% or 20.1% and sell down to 4.9% or 19.9%. This directly affects their need to file on subsequent transactions. Somebody with a more sophisticated knowledge of these things might be able to say what a holders motives might be for such things, but they happen far too often to be statistically coincidental.
The real question is what is motivating the size and timing of his buying. Obviously, I have no idea what Pike is thinking.......just wish I did.