"WAIT, I FORGOT, SPONGETECH DOESN'T HAVE ANY DEBT, BOOOYAAAAA"
The last 3 10Q's filed by the company include the following phrase:
"The Company has no outside debt."
Which begs the question...is there "inside" debt?
I suspect that it's a naive question, but I need to ask it:
Funds were extended to SPNG by RME prior to, during and subsequent to the period covered by the referenced 10Q's. None of those 10Q's reflected any debt on their balance sheets. What did the advance of those funds represent if not an extension of debt when the terms of the funding include the right of the "borrower" to re-purchase the shares? Doesn't the stock just become a form of collateral and shouldn't the loan be recorded as what it is, a loan? As it stands, if I follow the transaction, these funds are being recorded as sales of common stock, with no reflection of the right of the lender's right to return them to the company on the company's balance sheet. Is that the proper way to account for these transactions?
"SPONGETECH DOESN'T HAVE ANY DEBT"
Are you sure about that?
