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The NY Post Article On SpongeTech, Featuring Yours Truly

Posted by Timothy Sykes on Thu 17th of Sep, 2009 07:18:05 AM
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UPDATE: The entire NY Post Article can and should be read right here

Perhaps Costco, MLB & the US Open (they do business and have allowed SPNG to advertise) should read my blog instead of waiting for the Driving Miss Daisy-esque SEC to come down on Spongetech Delivery Systems, Inc. (SPNG)…which has been sucking in financially ignorant suckers for several months now….I wrote about SPNG being a blatant pump & dump no less than five times with blog posts like these

Ah well, better late than never I guess

Thank you NY Post for the mention!:

(I currently have no position in SPNG, I just like seeing justice being done…this one isn’t tough to decipher…lots of shares available to short though so I might be short by the time you read this…only way to know for sure is if you subscribe to my real-time trade alerts subscription service or better yet learn my perfectly legal trading strategy of Short Selling pump & dumps like this with these instructional DVD packages)

Maybe SpongeTech should use one of its sponges on its financial books.

While the company behind popular soap-filled sponges looks like it’s flying high, and one of its ads at the US Open unexpectedly took center court when tennis star Serena Williams screamed at a line judge seated nearby, the Manhattan-based company’s business tactics have raised questions with regulators.

The Securities and Exchange Commission hasflagged SpongeTech’s financial statements for the last two years because of problems with the company’s auditor. What’s more, the company missed yesterday’s deadline to file an annual financial report with the SEC.

And its ticker is in jeopardy of being tagged with an “e” — the financial equivalent of a scarlet letter that warns investors that the company hasn’t complied with SEC reporting rules.

Meanwhile, the company’s complex dealings with its penny shares have led to accusations that SpongeTech is running a stock manipulation scheme — complaints that have made their way up to the SEC.

SpongeTech, which sells its wares through infomercials, posted an eye-popping 900 percent surge in sales, according to a June press release reporting that revenue had hit $50 million for the 12 months ended in May, vs. $5.6 million a year earlier

But on Friday, SpongeTech received a letter from the SEC ordering it to redo its financial statements for the last two years, including the one that just ended.

Drakeford & Drakeford, a firm with offices in three cities, including Los Angeles and New York, but just one partner, was SpongeTech’s auditor. Drakeford lost its accreditation from the Public Company Accounting Oversight Board on June 16, according to a letter from the SEC.

“It has nothing to do with us,” SpongeTech CEO Michael Metter told The Post.

But SpongeTech’s replacement auditor, Robison Hill & Co., doesn’t appear to be in the best standing with the PCAOB, either.

In a report earlier this year, the auditing watchdog blasted the Utah firm for numerous “audit deficiencies.” The PCAOB determined that Robison “did not obtain sufficient competent evidential matter to support its opinion” on its clients’ financial statements.

Metter acknowledged the report to The Post, saying he and his team “didn’t know that” when they hired Robison in July. He said SpongeTech hired Deloitte & Touche to “oversee” Robison’s work for 2008 and 2009, and to take over. Metter also said that SpongeTech has asked the SEC not to penalize it for the late filing.

Meanwhile, the company’s complex stock trail has raised suspicions of stock manipulation. Timothy Sykes, a penny-stock trader and author of a book about running a hedge fund in college, has publicly accused the company of being “a blatant pump and dump” scam.

Sykes cites the fact that as of March, the company had 1.55 billion shares outstanding — a 1,500 percent increase over last year. Several months prior, the company issued more than 300 million shares to a company tied to its executives, RM Enterprises, at a 40 percent discount.

More recently, SpongeTech has been publicizing a series of stock buybacks and reverse stock splits.. Shareholders say that with all the activity, they have no idea how many shares SpongeTech now has outstanding.

Metter declined to provide a number, or comment on speculation about the trading, but he vowed that neither he nor his fellow officers have sold a single share of the stock. The same holds true for RM Enterprises, he said.

SEC filings name Metter and his chief operating officer, Steven Moskowitz, as “control persons” and directors of RM Enterprises. But Metter denied to The Post that he is an RM Enterprises officer, saying it was Moskowitz’s relationship.

SEC spokesman Kevin Callahan declined to comment, saying he cannot confirm or deny “the existence or non-existence” of any investigation.

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  • PS I have no idea if SPNG crossed the legal line, my research simply proves they do some very sketchy stuff, all verified by SEC filings and info from StockPromoters.com...never received any complaints about my writing from any lawyers or SPNG...wish the Post had come to me for a quote, but I like how they phrased it
  • Timmy,

    SPNG is/wuill close below 5cents tdoay. I hae been shorting this the r/s news came out. below is a link for SPNG longs. {suicide is NOT the answer, }

    the "good" Doctor

    Are you in crisis? Please call 1-800-273-TALK
    Are you feeling desperate, alone or hopeless? Call the National Suicide Prevention Lifeline at 1-800-273-TALK (8255), a free, 24-hour hotline available to anyone in suicidal crisis or emotional distress. Your call will be routed to the nearest crisis center to you.
    •Call for yourself or someone you care about
    •Free and confidential
    •A network of more than 140 crisis centers nationwide
    •Available 24/7
  • Maryanne
    Be careful what you say about SPNG. This might come back to bite you since you are slandering their name. Also, as Metter has stated, "This SEC restatement has nothing to do with Spongetech." I imagine all company's that this accountant worked with are required to restate their earnings too. I would be careful of lawsuits for defamation. The Post is incorrect too. Quoting you as a source was a bad idea. I have reported this to as many that will listen to me.
    -Scott
  • Maryanne, all I've done is take data straight from the filings, the proof is in the pudding
  • Maryanne
    No, not quite. This is just the beginning of exposing you for who you are. We have a large group of shareholders working on this now. Let's see who wins in the end.
  • Maryanne
    Also, I can't wait to post back here after the 10K is out. Not only will you look like a fool, but it will prove your findings were incorrect. Again, ALL company's with Drakeford have to restate. Has nothing to do with SPNG. So, this is a non-event. Also, 50% of pink sheet stocks extend their 10K with no issues. The reason SPNG had to was simply they received the letter from the SEC asking them to have them looked at by their current account (along with SEVERAL other companies - as this was not specific to SPNG.) Also, their to-be accountant is Deloitte and Touche. You conveniently left that out.
  • Maryanne
    There are people that know your agenda, Tim. Here is another mitch0033@gmail.com as well as Gawker and other websites. This is personal now because you are manipulating my stock and this is illegal.
  • Maryanne, get this through your neanderthal sized brain: i dont have any SPNG stock, i could care less if it drops or rises...in fatc i wish SPNG had hired better promoters like GVBP to get the stock high enough to merit another short...as it stands, timalert subscribers and i made 35% in one day a while ago and because people like you have such small accounts that cant push this pump & dump higher, i havent touched it since...feels good to tell the truth, too bad you're so blinded by ignorance and greed to see it, good luck you little promoter and or sucker
  • Maryanne
    This just proves you are no better than someone on a message board. Let's just see what happens. I'll be sure to report back when they are at .29. Also, let's see what happens with how "reliable" your "theory" is. Maybe you should pay the $25 for the research report that was put out on Yahoo Finance yesterday. They have a much cheerier outlook.
  • Maryanne, your ignorance shows itself, the $25 research report was written by a known stock promoter, probly hoping to win SPNG's business...and yes, i'm no better than any message board poster and i could easily be wrong, all i got is my #1 ranking out of 30,000+ traders and a decade of seeing the exact same shit to back me up, but hey, why not trust a random internet troll, whose probably being compensated to say something. learn maryanne and stop being the sucker
  • Maryanne
    I brought back 23,000 to $500,000 and own many stocks. Being short in this environment is stupid. I know how to trade stocks. You also have been exposed for losing as much as you made. So, let's not go there. Also, look at the report more clearly that was done - it states EVERYTHING (not just tidbits and theories) and has their balance sheet. Also, many, many people are positive this stock. Let's see when the 10K comes out who was right. I say .29. Let's see who is right after the 10K. Oh, and just so you know, Deloitte and Touche doesn't pick up "pump & dump" companies. You will eat your words and I will be laughing all the way to the bank. Also, I don't resort to name calling - I leave that to the young and immature. This isn't personal, just business and you are wrong. I would hide when the 10K comes out.
  • dufdavid
    lol!!!!! Are we taking about being long in the sponge industry? nice!!!
  • Timmy, is it NOT funny, to watch these KooleAide drinking Longs that did not dump when the R/S news came and have ridden it down? do they honestly thionk that it is NOT going to below 5cents? LMAOQQQQQQQQQQQ

    BTW SPNG{{{{{{{{{{{{{E}}}}}}}}}}}} new Symbol Wait til the SEC {{{E}} is picked up tomorrow!!!!!!!!!!baaaaaaaaaaaaaaaaaaha
  • WINKERS!
    Your Weak Bro.. Your trying to Push this stock down to the .05 range so when the 10k is released you can make insane $$

    I am on the sidelines waiting for that magic $$##
  • why would i care what this stock does, the pumpers are incompetent, i like stocks over $1...i already made my 35% and left...my guess is there's more skeletons on the closet, after all, they invested $5mil in GFGU and yet there's still no SEc filing...the CEO says he didnt know his new accountants had been slapped for poor standards, cmon gimme a break
  • NOT ONKLY THAT TIMMY, But WHY did Spng NOT hire REAL NY Auditors? i mean the whole mantra has been to go to a "Senior" exchange, why surf the dumpster of CPA's? WHY BECAUSE DUMPSTER CPA"S TAKE BRIBESSSSSSSSSSSSSSS
  • hedgecrusher
    Maryanne, of all the companies involved with Drakeford, how many are delinquent to the level of SPNG? Could the decision against SPNG by the SEC been induced by the choice they made as a replacement?

    Finally, and most importantly, the Post article quotes Metter as stating he holds no control position in RM Enterprises. Has that been your understanding of his role there? Are you not worried that teh Bio he publishs lists him as both president and CEO of RME?
  • Maryanne
    SPNG is only delinquent in this current 10K. That is the ONLY filing they are delinquent on. Also, as you know, they cannot file this current 10K unless last year's 10K is re-audited. Hence, the extension. Also, as they stated in their PR, they were just informed on 9/11 that they have to have these looked over by their current accountant. So, that is just simply not enough time. Let's just all cool down and watch for the 10K. The R/S is Tuesday and Deloitte and Touche take over. They don't take just anyone that walks in. This stock price is a steal right now and wish I had more to put in it. I am not a "pumper" as Tim wants to say (along with other choice words), just see it for everything. I know when I turn on my TV it is Spongebob Sponge everywhere. My kids can recite it to me. The sponges actually work - I have them and they are advertising everywhere. They aren't paying the football, baseball and racing team with their good looks. Also, the US Open. Come on folks, don't let these shorts ruin your changes of a triple at the price of .09 right now. I am holding for the big payoff. When the r/s happens, watch the run up - squeeze!!!! Done with this conversation now.
  • U can hpe all u want, i deal in facts substantiated by SEC filings and evidence of paid promotion...your SPNG just became SPNGE, one day u'll learn but it seems like today is not the day yet for you you stubborn wench
  • Listen, I hated timmy Sykess when he and his minions destroyed my stock thru a shorting consortium. HOWEVER, I respect his business model and certainly can not deny he knows what the fukk he is speaking of.

    This stock is done.

    Are you in crisis? Please call 1-800-273-TALK
    Are you feeling desperate, alone or hopeless? Call the National Suicide Prevention Lifeline at 1-800-273-TALK (8255), a free, 24-hour hotline available to anyone in suicidal crisis or emotional distress. Your call will be routed to the nearest crisis center to you.
    •Call for yourself or someone you care about
    •Free and confidential
    •A network of more than 140 crisis centers nationwide
    •Available 24/7
  • shorting consortium? WTF r u talking about, who is this patrick byrne? i'm just sitting on a couch linking to the SEC filings and using common sense....there are some true wackjobs in penny stock land let me tell u
  • iseespam
    This article is SPAM !!!!!
  • DonnyKing
    How do you Short a Stock ? I would love to try this on a Few.. I am new to Penny land...
  • Name
    SPNG has a distribution agreement for its pet care product line with Phillips Feed & Pet Supply, one of the largest distributors of pet products on the east coast, with 3 distribution sites that are strategically located in Easton, PA, Greenville, SC and Lakeland, FL. Phillips services retailers from New York to the Florida Keys. Phillips distributes to over 3,000 clients including Pet Stores, Feed & Farm stores, Groomers, Veterinarians and Humane Organizations.

    SPNG's product acceptance has continued to increase among all distribution channels and SPNG is making great strides in reaching its goal of 100,000 locations by the end of this year.
  • BAAAAAAAAAAAAAAAAAHHHHHHHHHHAHHAHHAAAAAAAAAAAAAAA

    YOU LONGS ARE FUKKKKKKKKKKKKED>>>
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Date Stock Buy Sell Net
Nov 19 AENY $2.80 $3.02 $1148
Nov 18 NLST $4.16 $4.40 $947
Nov 18 IMGG $1.42 $1.64 $2094
Nov 17 NLST $5.04 $5.59 $2195
Nov 13 VRMLQ $21.50 $22.97 $2901
Nov 11 EONC $2.61 $2.80 $687
Nov 10 EONC $2.74 $3.36 $9784
Nov 6 QXM $4.31 $4.80 $1936
Nov 4 COT $8.66 $8.88 $642
Nov 4 QXM $4.61 $4.89 $822
Oct 30 DDRX $25.70 $26.53 $812
Oct 29 CTDC $4.00 $4.42 $781
Oct 26 AWSL $3.24 $4.10 $2516
Oct 23 RODM $5.27 $5.23 $301
Oct 22 AMLM $2.69 $2.97 $820
Oct 22 USEG $6.12 $6.09 $85
Oct 20 CBOU $8.93 $9.06 $243
Oct 16 VRMLQ $16.79 $18.65 $2773
Oct 13 YONG $11.05 $11.66 $1202
Oct 13 NPHC $0.59 $0.71 $583
Oct 12 IMGG $0.60 $0.70 $682
Oct 9 ZAGG $5.50 $6.10 $2380
Oct 7 GVBP $0.03 $0.27 $702
Oct 1 NPHC $0.70 $0.85 $1482

Total: $98,094 (681%)