Replies to post #314540 on Spongetech Delivery Systems, Inc. (fka SPNGQ)

[harvard homeboy]

I want to hear who you "think" is going to force them into chapter 11?


I guess you know SPNG has had major cash flow problems since day one. If you look at the company's most recent 10-Q (the one filed for the quarter ending Feb 28 2009) it ought to jump right off the page at you.

SPNG was negative to the tune of almost $10 million in the cash flow from operations department for that nine month period.

However, now SPNG doesn't have the luxury of being able to sell stock to newbies at grossly inflated prices to keep the doors open. And that's why we see Moskowitz bouncing checks right and left, and one lawsuit after another for non-payment of monies due pursuant to contracts SPNG entered into.

All of this was fairly predictable, in my view, just by stepping back from the financials of a year ago and doing a reality check. Does it make sense that a company would be selling sponges at $9.95 to consumers in Moskow and Buenos Aires but not selling them like hotcakes in the U.S.?

Well, does it?

Sure doesn't to me. Especially after I visited the Moskow and South American ebay sites and poked around looking for anything tied to the word "Spongetech".

However, if you look at this company's financial statements of a year ago and don't see red flags everwhere, as I did, you need to take another look.

It took me all of about three minutes to figure out that this was nothing more than a pump and dump scam, and a transparent one at that.

By the way, the answer to your question and the catalyst forcing SPNG into Chapter 11 is going to be the continued judgments against the company, which will continue to mount, unpaid, until two of the creditors join together and force SPNG into involuntary bankruptcy.

Then the shareholders get zeroed out.

GLTY