Spongetech Delivery Systems, Inc. (fka SPNGQ)

[loanranger]

Nice find.
I thought that it was interesting to see that he signed the NDA on 8/18/05 and then appears to have participated in a private placement of preferred shares, convertible into common that the company reported on 12/20/05. At least he reported ownership of preferred shares on 1/3/06 that he hadn't reported before.
This can only mean one of 2 things. Either 1)the purchase of the preferred shares isn't treated the same for insider trading purposes as an open market purchase of common shares would be and is a permitted transaction or 2)the NDA was over in less than 4 months.

The disclosure rules for NDA's are messed up. Simply...there aren't any. I guess the SEC decided at some point that they didn't require "material event" treatment. So what happens the vast majority of the time is that the company heralds the signing of the agreement in a PR because it's such FANTASTIC NEWS and then nobody EVER finds out when it has ended. (I know this from an effort to find out when the Pike/American Dairy agreement ended....ADY IR wouldn't tell me because "they weren't required to"). This allows everyone to speculate as to the propriety of any trading by the investor after the NDA is signed. And more questions if there ISN'T any trading by that investor.

So, and I'm not suggesting this is true, Pike could have an NDA with SPNG right now and we wouldn't know about it unless the company pr'ed it. And while Pike theoretically couldn't buy or sell his shares during the agreement period, we wouldn't know if any lack of trading on his part would be of his own volition or if the agreement had ended.

Can anyone suggest a good reason for the SEC to leave this lack of transparency intact? (Non-conspiratorial reasons preferred.)