Spongetech Delivery Systems, Inc. (fka SPNGQ)

[loanranger]

h,
That post drew a lengthy rebuttal:
"Due to the difficulty in determining the viability of SA Trading and Dubai Imports, a third customer is offered up as the source of the majority of sales for the periods in question......those being the first quarter and the first 9 months of the 2009 fiscal year. Why not the second quarter??? You'll see.

The question posed was:
"If we were to completely throw out SA Trading & Dubai Export Import Company, could it be that US Asia Trading (aka U.S. Asia Distribution Company, Inc.) is actually the main customer whos purchasing activity makes up the majority in sales, that is, of the majority in sales within the 67.7% & 99.4% figures within these 2 time periods?"

Using the posted figures:
The first USAT order for 25,000 units was shipped in the third quarter of FY 2008 (December). Assuming that to be true, it would have no impact on FY 2009 sales and not be a part of the sales figures in question.

The subsequent order called for 250,000 units, generating $2,750,000 in (presumably) wholesale sales to be recorded as revenue by SPNG. These were scheduled for shipment from August to December 2008, straddling the first, second and third quarters of FY 2009 for sales purposes. SPNG reported revenues for that 9 month period of $31,050,633. ASSUMING (I admit it) that the order in question was shipped during the intended period and that no additional shipments were made, USAT would have accounted for a shade less than 9% of the company's 9 month sales and as such could hardly have made up for "the majority in sales, that is, of the majority in sales within the 67.7% & 99.4% figures within these 2 time periods?" FWIW, a customer with the "majority in sales" (99.4% of $31m x 50%) for the 9 month period would have been a $15,000,000 customer, which USAT clearly wasn't.

Being mistaken is hardly a crime.......we all are at one time or another. The thing that struck me about this analysis was the use of the first and third quarter data to the neglect of the second quarter. So I looked at it.

The post provided the following, with links:
“For the first quarter ended August 31, 2008, three customers, SA Trading Company, US Asia Trading and Dubai Export Import Company, accounted for 67.6 percent of sales.”

http://www.sec.gov/Archives/edgar/data/1...

“For the nine months ended February 28, 2009, six (6) customers, SA Trading Company, Dubai Export Import Company, Fresco Sales Corp, US Asia Trading, New Century Media and Walgreens accounted for 99.4% percent of our sales.”

http://www.sec.gov/Archives/edgar/data/1...


The post did not provide this:
For the six months ended November 30, 2008, three customers, SA Trading Company, Dubai Export Import Company, and New Century Media accounted for 82.9% percent of our sales.
http://www.sec.gov/Archives/edgar/data/1...



So the customer proposed as possibly accounting for the "majority in sales":
1. was one of the 3 customers that accounted for 67% of the sales for the first 3 months of the year.

2. was one of the 6 customers that accounted for 99% of the sales for the first 9 months of the year.

3. yet was NOT one of the 3 customers that accounted for 82% of the sales for the first 6 months of the year. And a customer that did not have a piece of the 67% in the first 3 months has some how managed to replace them as one of the 3 customers that accounted for 82% of the first 6 months.



I'm pretty sure that that is mathematically impossible and I'm certain that it is mathematically improbable. And I believe that the statistical probabilities that the 6 month statement was innocently overlooked are similar."