The company was founded in 1999 under the name Romantic Scents, Inc. They have had several name changes as well as business model changes. Company changed its name to Spongetech Delivery Systems, Inc. in 2002. Currently company designs, produces, markets and distributes cleaning products for vehicular use. Basically they produce a special technology sponges which can be pre-loaded with detergents and waxes which are absorbed in the core of the sponge then gradually released during use. Company has invested 90 thousand in research and development of same technology sponges for bath, pet and home use. Prototypes of household cleaning sponges are being testing by a national detergent manufacturer for possible use under its logo and brand.
Company‘s balance sheet doesn‘t look very promising. For the second quarter, ended May 31, 2007, company had no cash left and a total of $110,000 in assets against $269,000 in liabilities. Still they have generated revenue of $29,000 which was 100% more than previous quarter. The problem is that cost of revenue was even bigger than revenue itself. Further we take into account operating expenses and get a total net loss of $193,000 over just one quarter which looks devastating for a company with no cash and large liabilities. Good news is, the loss this quarter was at least only one third the amount company lost previous quarter.
Management has plans to attend trade shows and promote their products. They will also try to seek a production finance company to fund their purchase orders. Still the biggest problem remains the fact that company has no money to do anything. They are currently being funded by their officers, directors and affiliates although there are no formal funding agreements.
