Spongetech Delivery Systems, Inc. (fka SPNGQ)

[loanranger]

P: Pike is assured they are Free trading
and is shown the Opinion Letter to prove it.

L: One cannot buy shares at a 40% discount and have those shares be afforded the same treatment as any other shares.

P: Yes, one can buy free trading shares in bulk that are free trading.

I didn't know this. You are saying that a publicly held company can privately sell shares at a 40% discount and that those shares can be sold in the open market the next day? Is this true?
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P: Since he still holds the original 100mm plus whatever he buys in the open market, his filings will show the total owned until he elects to cover, if ever, or returns the first 100mm to the Mutt Bros.

So, as I said, he ends up with a filing showing he owns 200,000,000 open shares and yet he owns no shares. Right? Or are you suggesting that he files the short coverings and returns to M&M as sales/dispositions?
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Then you changed your scenario. Instead of Pike laying out the cash for the second 100,000,000 shares at .045per, M&M front him the money for that purpose. Yet you neglect to mention that M&M outlay when you sum up: "The Mutt Bros don't actually get stiffed either, since they already have the original $10.6 million AND will get the 100mm shares returned to them".

And on the issue of the pps on their initial 100,000,000, a highly suspect poster (me) showed quite a while ago that it was $.138, not $.106:
(I compiled the number of shares purchased and the dollars spent to purchase them on the first 2 Form 4's that were filed.
They totaled 45,570,000 shares and $2,037,825 (resulting in an average pps of $.0447).
http://www.sec.gov/Archives/edgar/data/1201251/000101359409001621/xslF345X03/spongetechfm4-102909_ex.xml
http://www.sec.gov/Archives/edgar/data/1201251/000101359409001678/xslF345X03/spongetechfm4-122409_ex.xml

The cumulative shares purchased and dollars spent were first reported by Pike on their 13D filed on 12/24.
It reflected a total of 145,570,000 shares and $15,871,027 (an avg pps of $.109).
http://www.sec.gov/Archives/edgar/data/1201251/000101359409001676/spongetech13d-122409.htm

Deducting the intervening purchases from the cumulative purchases resulted in the original 100,000,000 shares having a cost of $13,833,202.....or an average pps of $.138.)
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So, just for fun, let's see where we end up:
Assumptions
1. Pike pays M&M $13,800,000 for 100,000,000 million shares.
2. Pike shorts 100,000,000 shares @.23per. (.23-40%=.138)
3. Based on your plan B, M&M fronts $4,500,000 to buy another 100,000,000 shares.
4. Pike covers his 100,000,000 share short position and gives M&M the other hundred million.

Summary
1. Pike is up $9,200,000 and has a slew of false filings.
2. M&M are up $9,300,000.
3. Share positions are the same as when the party started.

Fantastic!


Not buyin' it.