Replies to post #114994 on Spongetech Delivery Systems, Inc. (fka SPNGQ)

[printmail01]

sorry , Yes correct , i was trying to say the market cap is total share mutiplied by the currenmt PPS , I was trying to make point that the PE has nothing to do with market cap , sorry , just posting to fast and not reading them , if u read futher in my post u can see waht I measn.. sorry , u r corect.

[wbgiants1141]

Please read message # 114905 from macklacrosse.... completely blew my mind the amount of research the guy did... I am 100% convinced of the legitimacy of the company after reading what this guy had to say and seeing the research he came up with... Scovanner, if after reading this post in its entirety you are still as skeptical as you are now then I don't think anything would convince you. Just my opinion but I think that anybody currently invested in or looking to invest in this company should have a look at this, it addresses literally every controversial issue I have seen so far in regards to SPNG.
-WB

[printmail01]

Good info , SPNG A/R is a RED FLAG imo , it appears they are booking orders taken on phone or a PO faxed over , not yet produced or shipped, as receiveable - Very confusing filings...

AND - This still bothers me BIGTIME , You cant really rely on the SPNG filings , you cant calculate the TRUE earnings being some costs are being paid by outside parties , friends family of the CEO and not counted as expenses on the books , so the true profits are unknown? They will need to clean this up to have ANY chance at an uplist to Nasdaq:


Cost of Goods Sold

Cost of goods sold was $6,547,563 or approximately 36 percent of sales, for the six months ended November 30, 2008 as compared to $48,676 or approximately 14 percent of sales, for the six months ended November 30, 2007. While the cost of goods sold increased significantly as a result of our increase in sales. In addition, during the six months ended November 30, 2008, a portion of our cost of goods sold, including costs related to warehousing, packaging, and shipping of products, were borne by (and not charged back to the Company) a privately-held company controlled by our Chief Operating Officer.

THEN AGAIN UNDER SGAE>

Selling, general, and administrative expenses for the six months ended November 30, 2008 were $733,655, an increase from $95,108 for the six months ended November 30, 2007. During the 2007 fiscal year, a portion of our selling, general and administrative expenses, including costs related to product and package design as well as certain consultants, were borne by (and not charged back to the Company) a privately-held company controlled by the family of our Chief Operating Officer. During the current fiscal year, some of these costs are still being borne by (and not charged back to the Company) a privately-held company controlled by our Chief Operating Officer.


PAGE5
http://www.sec.gov/Archives/edgar/data/1201251/000114420409002030/v137081_10q.htm

[printmail01]

Here is some DD from before I invested in SPNG , I have since flipped 6x made good chunk of change , holding shares now , small amount , have small profit on them , will let them ride...

But - IMPO A/R is another red flag > IMPO SPNG is booking orders and POs as revenue and A/R even before the product is made and shipped...

Per the filing noted below (see link) it appears SPNG is listing $11 million of "purchase" orders as sales and Accounts receiveable.(?) IMO the A/R and sales in this filing is very deceptive > When the product SHIPS and or you collect the monies you list the sale??? IMPO listing "purchase orders" as sales and accounts receiveable before you produce THE ENTIRE order and or ship ALL of the product is deceptive....

IMO it appears they completed the "final test procedures" and got final approval for the 2 new sponges and then listed a years worth of Purchase orders as a sale?

Per the filing:

To date we have received purchase orders of $4.7 million for Puddle Pal’s Children’s Sponge products and $6.4 million for Uncle Norman’s Pet Sponge products.

7. Revenue Recognition

Sales and services are recorded when products are delivered to the customers. Provision for discounts, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. In instances where products are configured to customer requirements, revenue is recorded upon the successful completion of the Company’s final test procedures. For the six months ended November 30, 2008, three customers, SA Trading Company, Dubai Export Import Company and New Century Media, accounted for 82.9 percent of sales.

http://www.sec.gov/Archives/edgar/data/1201251/000114420409002030/v137081_10q.htm

[overachiever]

The accounting here suggests that many of the orders may well be bogus. The receivables jumped way too much and very little cash resulted from the increase in sales. In addition, take a look at the ciustomer list and try to find these companies listed as their biggest customers (99.4% of total sales). One is a seller of video tapes and DVDs and the rest of them outside of Walgreens can't be found anywhere.

I am becoming more and more convinced that these guys have been cooking the books with bogus orders.