Spongetech Delivery Systems, inc. (OTCBB:SPNG, SPNG message board) is a tiny company with an 800 square foot office in the Empire State Building that claims to have developed a biodegradable sponge that eliminates the use of a bucket. A very hot video just showed up on youtube featuring a woman washing a car with one of these new Sponges.
YOUTUBE VIDEO FROM SPONGETECH
The company has been making announcements lately that are quite beyond our comprehension. First they announced a television spot that will be viewed by 14 million homes. Then something about being featured in over 900 environmentally friendly magazines. In May, they announcied they received large orders to be shipped later in the year. One order was for $1.5 million and another for $3 million.
What is beyond our comprehension about these announcements is how do they intend to accomplish any of these things when they have no money? According to their latest SEC filing this company has $3,477 (three thousand four hundred seventy seven) dollars in the bank. That doesn't even pay a month's rent in a manhattan office.
They originally had incorporated under the name Romantic Scents, Inc. They have had several name changes and business model changes as well. In their 8 years of operations they have never made so much as a dime in profits, and have accumulated a deficit of approximately 3.4 million dollars.
Yet in spite of their operating inefficiencies management finds it perfectly appropriate to pay themselves salaries that exceed the entire revenues of the company. During their Fiscal year 2005, the company's entire revenue was $1,051 (one thousand fifty one)/ Yet, the three top directors recieved salaries of over $490,000 each.
What is even more odd is that their salaries were in Common Stock that they valued at $0.15. When you receive salary in stock you have a tax liability that you must pay. We estimate the officers will owe $250,000 each yet have not received any actual money as compensation. (I will not be submitting my resume to work as an exec at this company.)
The company has 37 million shares outstanding which puts the total valuation market valuation with the stock at $0.19 about 7.5 million. This valuation is not too high. But given their historical lack of a business, current lack of assets, and lack of taste with their latest video it still looks high to us.
They have not announced any new financings. Quite frankly, we cannot imagine how a company with $297,000 in currently due liabilities and $3,000 in the bank can possibly finance these alleged large orders.
Further, if they did receive orders of the magnitude that they claimed in their recent press releases, that is a material event. An event as such requires a form 8-k to be filed with SEC. As yet the company has not done so.
As much as we enjoyed the video and hot press releases coming out of this company we cannot give any investor who wants to buy this stock at $0.19 our blessing.
Still Frame of Video (not bad)
References
YOUTUBE VIDEO FROM SPONGETECH
The company has been making announcements lately that are quite beyond our comprehension. First they announced a television spot that will be viewed by 14 million homes. Then something about being featured in over 900 environmentally friendly magazines. In May, they announcied they received large orders to be shipped later in the year. One order was for $1.5 million and another for $3 million.
What is beyond our comprehension about these announcements is how do they intend to accomplish any of these things when they have no money? According to their latest SEC filing this company has $3,477 (three thousand four hundred seventy seven) dollars in the bank. That doesn't even pay a month's rent in a manhattan office.
They originally had incorporated under the name Romantic Scents, Inc. They have had several name changes and business model changes as well. In their 8 years of operations they have never made so much as a dime in profits, and have accumulated a deficit of approximately 3.4 million dollars.
Yet in spite of their operating inefficiencies management finds it perfectly appropriate to pay themselves salaries that exceed the entire revenues of the company. During their Fiscal year 2005, the company's entire revenue was $1,051 (one thousand fifty one)/ Yet, the three top directors recieved salaries of over $490,000 each.
What is even more odd is that their salaries were in Common Stock that they valued at $0.15. When you receive salary in stock you have a tax liability that you must pay. We estimate the officers will owe $250,000 each yet have not received any actual money as compensation. (I will not be submitting my resume to work as an exec at this company.)
The company has 37 million shares outstanding which puts the total valuation market valuation with the stock at $0.19 about 7.5 million. This valuation is not too high. But given their historical lack of a business, current lack of assets, and lack of taste with their latest video it still looks high to us.
Further, if they did receive orders of the magnitude that they claimed in their recent press releases, that is a material event. An event as such requires a form 8-k to be filed with SEC. As yet the company has not done so.
As much as we enjoyed the video and hot press releases coming out of this company we cannot give any investor who wants to buy this stock at $0.19 our blessing.
Still Frame of Video (not bad)References
- Annual Report on file with SEC
- Quarterly Report on file with SEC
- Spongetech's you tube Profile
Comments (34)
1. Denny
September 07, 2009, 10:34AM2. PennStockMaven
July 28, 2009, 09:18AM3. Tony
July 24, 2009, 02:09PM4. Julia
June 22, 2009, 11:21PM5. Gloria
June 19, 2009, 12:47AM6. ProTrader
June 18, 2009, 12:57AMStock is flying...
What were you saying? Your article is laughable now!
7. KrzyMike B
June 15, 2009, 07:52AMThe Sponge Tech is Owned by Warren Buffet
8. b williams
June 14, 2009, 09:25AMLook at what these people secured in orders plus a patent on the sponge is huge......
I am in for the long haul.
9. I made $$
June 09, 2009, 10:16PMPUNKS!!
10. joe
June 09, 2009, 12:52PM11. ROller12
June 07, 2009, 12:34AM12. GiGi_McGee
June 04, 2009, 09:19AM13. Jgrand72
June 01, 2009, 09:32PM14. Dragon
May 19, 2009, 03:26PM15. Caseytown
May 18, 2009, 05:50PM16. STEVEN B
April 15, 2009, 10:18AMFor the nine-month period ended February 28, 2009, the company reported revenues of about $31,000,000 compared to $1,560,000 for the comparative period of 2008. Net income for the nine-month period ended February 28, 2009, was over $ 6,250,000 compared to a net loss of $197,150 for the comparative period of 2008.
17. Warren B
April 08, 2009, 10:26AMBuy today I see Big sales and growth ahead for spring...
18. JKiss...SPNG
April 05, 2009, 05:23PMSPNG IS GOING UP. EASY $$ MAKER
SIT BACK AND TIME TO MAKE SOME $$ IN THE NEXT 60 DAYS
19. BigMoneyMike
April 05, 2009, 05:19PMThey are showing alot of Movement and Growth..
20. What Now MR SPNG....
April 05, 2009, 05:17PMFastest $80k I ever Made.
21. stock guru
April 03, 2009, 03:07AM22. wizard
April 02, 2009, 07:49AM23. Dr. Evo
April 01, 2009, 05:45PM24. mindaugas
January 30, 2009, 05:19PM25. prisoner
January 30, 2009, 07:58AM26. sponge
January 29, 2009, 09:11AM27. copytech
November 03, 2008, 08:27AMas for directors pay they must really believe in thier company to take stock as payment if they were so dumb and distructive they would have taken all it in cash and soaked the company dry
take a look at this stock again and write a current review
lets hear you say you were wrong and eat some cow sir
28. Mr Exposingamateurfinancialreporters
September 20, 2008, 03:31PM29. spnginvester
July 21, 2008, 09:50PM30. Analyst
July 05, 2008, 12:20AM31. ROSA ESTHER RAMIREZ DE GULDEN
May 11, 2008, 12:42AMERWIN NORMAN GULDEN SANCHEZ(ESPOSO FALLECIDO EN SANTIAGO DE CHILE)
FIORELLA ELNNING GULDEN RAMIREZ (HIJA)
ELDRICH IVETTE GULDEN RAMIREZ (HIJA)
NORMAN WAGER GULDEN RAMIREZ (HIJO)
ERWIN JUNIOR GULDEN RAMIREZ (HIJO)
ROSA ESTHER RAMIREZ DE GULDEN (ESPOSA DE ERWIN GULDEN )
32. ROSA ESTHER RAMIREZ DE GULDEN
May 11, 2008, 12:36AMMIRIAM ROSE RAMIREZ GULDEN (BISNIETA DE CARLOS GULDEN CUADROS)
MELANIE GRAYCE RAMIREZ GULDEN (BISNIETA DE CARLOS GULDEN CUADROS)
TANTO MIS HIJOS Y NIETAS RESIDEN EN SANTIAGO DE CHILE
GRACIAS POR DARNOS LA OPORTUNIDAD DE PODER ACCEDER A ESTA PAGINA.
33. ROSA ESTHER RAMIREZ DE GULDEN
May 11, 2008, 12:26AMERWIN NORMAN GULDEN SANCHEZ(ESPOSO FALLECIDO EN SANTIAGO DE CHILE)
FIORELLA ELNNING GULDEN RAMIREZ (HIJA)
ELDRICH IVETTE GULDEN RAMIREZ (HIJA)
NORMAN WAGER GULDEN RAMIREZ (HIJO)
ERWIN JUNIOR GULDEN RAMIREZ (HIJO)
ROSA ESTHER RAMIREZ DE GULDEN (ESPOSA DE ERWIN GULDEN )
34. jeme
February 17, 2008, 10:32AM