Thursday, June 18, 2009

More Spongetech Deception

I ran across a post on the Yahoo Board from a poster going by the name of AngusDoctor.
Very keen eye this person has as this particular piece of evidence escaped my notice.

It would seem our very own Michael Metter and Steven Moskowitz need to read the company's Code of Business Conduct and Ethics again. (see earlier post)


In a Press Release issued on April 15, 2009, Spongetech states , 

NEW YORK, April 15 /PRNewswire-FirstCall/ -- SpongeTech® Delivery Systems, Inc. America's Cleaning Company(TM), (OTC Bulletin Board: SPNG - News), today reported record sales of over $13,000,000 for the third quarter ending February 28, 2009. Revenues for the period increased by $11,859,353 over revenues reported for the same quarter last year. Net income for the third quarter of 2009 was over $2,250,000, compared to a net loss of $188,482 for the comparative 2008 quarter; reflecting exponential growth over the same period last year.

That is HUGE news for shareholders if I must say so myself.

Unfortunately,,,,,, in the 10Q released 5 days later on April 20, 2009 it states on page F-4 in the section "Statements of Operations - Unaudited"


For the three months ended
February 28, 2009
February 29, 2008
 $13,164,277  $1,281,704 
Cost of goods sold
  6,809,354   174,022 
Gross profit
  6,354,923   1,107,682 
Operating Expenses
Advertising and promotion
  3,694,677   738,760 
Selling, general and administrative
  330,801   176,104 
Research and development
  3,125   0 
Depreciation and amortization
  33,257   4,336 
Total operating expenses
Income from operations and before provision for income taxes
  2,293,063   188,482 
 Provision for income taxes
  779,641   0 
Net income
 $1,513,422  $188,482 
Net income per share from continuing operations:
Basic and diluted
 $.00  $.00 
Weighted average number of shares outstanding:
Basic and diluted
  1,096,245,460   115,056,086 

The accompanying notes are an integral part of these statements



I do not know about you people but I can detect the faint scent of deception regarding this Press Release and the 10Q.
It seems extremely obvious to me that in no way shape or form can you confuse the two figures that I have texted in blue.
One says - Income from Operations,,, and one says NET INCOME
Income from Operations is over $2,250,000.
NET INCOME is only $1,513,422
The Press Release stated NET INCOME WAS OVER $2,250,000

You see how it works is like this,,,,
first you have your Income from Operations,,,, then you pay income taxes on your Income from Operations,,,,,,,AND THEN YOU CALCULATE YOUR NET INCOME.

I don't know, maybe it is just me, maybe I am nitpicking???????
Or maybe I expect the Officers of a Public Company to be Honest and Straightforward with shareholders.
But what do I know????? I'm just Moe


Special Thanks goes out to AngusDoctor for the orignal post which can be found in the links below.


  1. Moe,


    this is "angusdoctor" on Yahoo



  2. No Problem Worm, always happy to help a fellow blogger

  3. I listened to you...MOE!