Replies to post #147545 on Spongetech Delivery Systems Inc (fka SPNGQ)

[z4lover]

It is true, Wadi has kept a chart of this of which I have seen everything adds up...

722 million shares is the correct number.

[wadirum1]

Alright, let me walk you through this:

Here are the PRed and Q2 10q share reductions through 2/2/09:

 
  1/13/09 10q	133,577,066 (RM transfer) 
  1/13/09 10q	76,623,293 (affiliate transfer) 
  Jan PR	        79,000,000 (RM transfer) 
  Jan PR	        46,000,000 (RM transfer) 
  Jan PR	        50,000,000 (RM transfer) 
  Jan PR	        55,824,336 (buyback) 
  2/2/09	        30,000,000 (RM transfer) 
 

Now, if you exclude the 55mm buyback and sum the rest up...lo, and behold, you get 415mm. This is 415mm going to SPNG from RM and from the affiliate.

So, 415mm went to SPNG according to the PRS (and again the buyback is a different kettle of fish, so I'll leave that on the sidelines for the moment).

OK, now IF that had been the end of the story, SPNG would have ended Q3 with 700mm OS (give or take). But in fact, these 415mm apparently slosh back over to RM, maybe right before the end of the Q, in a transaction recorded at par.

All right, I admit that I do not understand why this was. But because of this (and because 79mm of the 306mm were, I believe, issued in Feb, the rest being issued prior to 1/13), we ended up with 1.29B on 2/28.

Finally, we see RM cancelling 526mm shares prior to the filing date in April, which brings us down to 722mm.

The numbers actually work out very neatly. I don't understand why this par transaction occurred -- but I think we can TOTALLY DISMISS any notion that SPNG has issued an extra 415mm that they erroneously forgot or intentionally ignored when giving us the Q3 O/S numbers.

Now, I'd love it if somebody could figure out why this 415mm went to SPNG (apparently for free), back to RM (at par), and then got retired as part of the 526mm (again, no $$ mentioned). But I've already thought about this stuff WAY too much.

Good luck!

Wadi