Essentially. Walgreens said they never paid SpongeTech more than $10,000 out of only $295,000 in orders over their entire relationship. A Dicon Exec said Dicon never sold them enough sponges to do near the business they claimed they were doing. All international sales were to companies that did not exist and SPNG was only able to show a minor portion of the amount of money they claimed was coming in from these fictional customers. These transactions were from multiple off shore accounts in countries with banking systems known for making it easy to launder money... AND the comments on the wire transfers cited things like "investment" that had nothing to do with sales. This doesn't even get into the proven fact that SpongeTech Execs forged documents to try to prove these companies existed. They even used zip codes that didn't exist on multiple documents that were supposedly from multiple companies. Read the criminal complaint and you will know this is over.
As far as salvaging the company... what is there to salvage? If you believe in the product or think it has potential - so what. It will be sold off in the bankruptcy sale. All creditors, especially those with judgements against the company for fraud, will get their money first and sock holders will get $0. Whoever buys the assets and rights to any IP they own may continue to sell the products, but that doesn't matter to current stock holders. There will be a completely different entity behind it.
And don't think I'm a basher. I always thought something smelled fishy here and planned to get out after the 10K, but I was positive throughout. I definitely protected myself and didn't come out negative due to flipping the stock some, but I didn't think the fraud was as big as it is until recently. I guess I gave these guys the benefit of the doubt in thinking that they weren't stupid enough to hide everything right out in the open... which they did.
AI
