Replies to post #6611 on Spongetech Delivery Systems, Inc. (fka SPNGQ)

[WPOSullivan]

I've been reading the 10KSB over and over again, looking for clues and these paragraphs interested me:


In April, 2008, The Company signed Representative Agreements for sales representation for Spongetech products, across the United States of America and Canada with Andaro, Inc. and PSM Group, Inc./Four Seasons Global, Ltd. This is in addition to the sales efforts of other representatives. The sales representatives will receive seven (7%) of net sales which they generate and will be paid on the tenth day of the month following the month in which the sales are made.


3
·
On July 15, 2008, we entered into an agreement with Arthur Dunkin, as sales consultant that targets sales in the auto supply and retail stores in the United States. The sales consultant will receive seven (7%) of net sales which they generate and will be paid on the fifteenth day of the month following the month in which the sales are made.

Google searching on those companies was not optimistic.
Andaro Inc. http://www.andaroinc.com/clients.htm makes no mention of Spongetech as a client and PSM, http://www.psmgroupinc.com/ is under construction (Aside: They are very close to me in Chicago area, maybe I'll take a trip)

So then this caught my eye:

We also market our products at trade shows. In the next twelve months our management intends to attend the following shows: Licensing International Expo, Automotive Aftermarket Products Expo Global Market Development Center’s General Merchandise Marketing Conference and the National Hardware Show and other selected national and regional shows in the United States. We continue to look to participate in international shows where our product can be sold.

Licensing International Expo 6/2-6/4/09 has no mention of our boys, next up Automotive Aftermarket Products Expo 11/4-11/6/08 (Las Vegas Baby!) http://aapexshow.com/networkNow/public/Booth.aspx?IndexInList=11&BoothID=116542&FromPage=nz_ALExhibitorSearch.aspx Yup, SpongeTech is an exhibitor!

Others haven't updated their sites yet for 2009 shows.

This is the real deal. Dilution and bank loan issues aside, I think we'll do very will riding the wave here.

Just my contribution to the groups DD.

If and when I'm in the Northbrook area, I'm make sure to stop in to PSM and offer them some, um, web-site help ;)

WP

[doogdilinger]

winner06...for starters they recently increased the A/S to make room for this needed dilution phase that's all but passed now...& the increase was only to 800M A/S ok.

So when you ask when will this dilution stop it's not like there's 5B authorized here for them to continue mindless dumping...in fact the self funding they just enacted was to cover manufacturing & marketing costs to ensure they're able to implement the rest of their growth...& to me the plan on the share structure issue will now go like this...as their revs begin ramping up over the coming weeks...they'll be taking a percentage of those sales & rolling them into the RME share buyback in stages ok.

So instead of talking about this dilution phase that's over now IMO...the talk around here will be about the revs they're now driving & how they're buying back the RME shares in stages & lowering the O/S not increasing it k...hope this helps glty

[tturner617]

Damn fine DD. Thats how it should be done. Look for clues on the 10-k and trac em down.

New subject-----

If you have not noticed, almost all of the micro/nano Cap stocks are down. Saw a few talking heads on CNBC yesterday talking about that. Said the Hedgies have had a lot of redemption orders. Went on to say that Hedgies are major buyers of small micro Cap Co. Therefore, when they start selling as a group, the whole sector gets hit. When they have to liqidate, they don't give a damn if the price is too low, (unlike an indiv investor) they sell anyway, pushing the price even lower.

My take--if true, then 1. great time to accumulate during firesale, and 2. Tech analysis may not be as good. Tech may sig a bottom only to be pushed further.

[Whiplash_Investor]

They will get financing, but it's not overnight. They have "audited" 10K now which was the only stumbling block before. Dilution is over. Besides the 267M shares issued to RME was an interest free loan at a set buy and sell price of $.018/share.

They have commenced last week with the additional 25M share buyback of the float as well (based on comments from mgmt on 2 separate occasions in the last week - call them if you doubt. Dilution of the float is over.

Now, one more comment. The bank after having reviewed the assets of SPNG may need more loan collateral than assets available. In such cases, restricted shares are often held in trust at some slightly discounted price. These shares are not traded and donot represent dilution unless the company defaults onthe loan. Then and only then can they be traded. Once loan is paid off or assets reach required levels those shares are retired.