Attached files
| file | filename |
|---|---|
| 8-K - SPONGETECH DELIVERY SYSTEMS INC | v163086_8k.htm |
| EX-99.1 - SPONGETECH DELIVERY SYSTEMS INC | v163086_ex99-1.htm |
SpongeTech® Delivery Systems, Inc.
Announces Class Action
Lawsuits,
Resignation of Deloitte & Touche
LLP
and Files Lawsuit Against Cresta Capital
Strategies, LLC.,
NEW YORK, NY - SpongeTech®
Delivery Systems, Inc. (the “Company” or "SpongeTech")
“The
Smarter Sponge™” (SPNG) today announced that a lawsuit
was filed on October 9, 2009 by The Rosen Law Firm, P.A., in the United States
District Court for the Southern District of New York against SpongeTech, and its
officers and directors, Michael L. Metter, Steven Moskowitz, Frank Lazauskas as
well as RM Enterprises International, Inc. (an entity in which SpongeTech’s
directors and officers hold direct and/or indirect ownership interests, and of
which Mr. Moskowitz and Mr. Lazauskas serve as officers and/or directors), as a
purported class action suit on behalf of all purchasers of SpongeTech stock
between April 15, 2008 and October 5, 2009, alleging violations of the federal
securities laws.
In
addition, a second law firm announced that it has commenced a lawsuit in the
United States District Court for the Southern District of New York on behalf of
all purchasers of SpongeTech stock between April 15, 2008 and October 5, 2009,
inclusive. As of the date of this release, SpongeTech has not been
served in this action and has not seen a copy of the complaint.
When and
if SpongeTech is served in these actions it intends to carefully review the
complaints in consultation with its counsel, and prepare an appropriate defense.
SpongeTech and its directors and officers believe that the allegations set forth
in the complaint filed by The Rosen Law Firm are meritless and intend to defend
the action vigorously.
In
addition, the Company today announced that Deloitte & Touche LLP
("Deloitte") has notified the Company that it would not act as SpongeTech’s
independent registered public accounting firm for the Company’s fiscal year
ending May 31, 2010. Deloitte was scheduled to commence its review of
the Company’s financial statements for the quarter ended August 31, 2009,
immediately following the filing of the Company’s Annual Report on Form 10-K for
the fiscal year ended May 31, 2009.
Furthermore, the Company has filed a
lawsuit in the New York State Supreme Court, Suffolk County against Cresta
Capital Strategies, LLC. (“Cresta”). The complaint alleges a breach of contract, conversion,
unjust enrichment, breach of fiduciary duty and unlawful appropriation of
funds. The Company is seeking
compensatory damages in the amount of $2.75 million as well as punitive
and exemplary damages.
In March 2009, Cresta was hired by the
Company to serve as the exclusive investment banker to the Company in which
Cresta was to provide advice and services concerning potential merger,
acquisition and/or any business transactions. Upon modification of
the agreement with Cresta, in June 2009, the Company agreed to and did provide
Cresta with a $1 million cash advance which was to be used against future fees
as a result of any transactions under the agreement. Cresta did provide
investment banking services to the Company on the acquisition of Dicon
Technologies, LLC (“Dicon”) as well as introducing the Company to Getfugu, Inc.
(“Getfugu”). Cresta was paid in full all fees due with regards
to its participation in the Dicon transaction.
In August 2009, the Company was
introduced to Getfugu by Cresta, who was serving as investment banker for both
the Company and Getfugu. At the advice of Cresta, the Company entered into a
definitive agreement with Getfugu to invest $4 million into Getfugu’s mobile-based web search and
e-commerce technology, and that the Company would be the first company to utilize
Getfugu’s innovative mobile search
platform. An aggregate of
$1.75 million had been
advanced to Getfugu, soon after Getfugu rescinded the
transaction and to this date has not returned the monies to the
Company.
In September 2009, Cresta terminated its
agreement to serve as the investment banker for the Company, waiving and
forfeiting any right to the $1 million cash advance for future
fees. The Company has made demand for the $1 million, but Cresta has
failed to return any part of the cash advance to the
Company.
The Company alleges that Cresta
breached its fiduciary duty to the Company by assisting Getfugu in
obtaining money from the Company and failing to conduct any reasonable due
diligence on Getfugu or its officers and personnel and failing to provide the
Company with any reasonable due diligence upon which to make its investment
decision. The Company is seeking
compensatory, punitive and exemplary damages.
About SpongeTech® Delivery
Systems, Inc.
SpongeTech®
Delivery Systems is a company which designs, produces, and markets unique
lines of reusable cleaning products for Car Care, Child Care, Home Care and Pet
Care usages. These sponge-like products utilize SpongeTech®'s proprietary,
patent (and patent-pending) technologies and other technologies involving
hydrophilic (liquid absorbing) foam, polyurethane matrices or other ingredients.
The Company's sponge-like products are pre-loaded with specially formulated
ingredients such as soap, conditioner and/or wax that are released when the
sponge is soaked and applied to a surface with minimal pressure. SpongeTech® is
currently exploring additional applications for its technology in the health,
beauty, and medical markets. SpongeTech® Delivery Systems, Inc. intends to
globally brand its products as The Smarter Sponge™ .
Safe Harbor
Statement
Under The
Private Securities Litigation Reform Act of 1995: The statements in this press
release that relate to the Company's expectations with regard to the future
impact on the Company's results from new products in development are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. The results anticipated by any or all of these
forward-looking statements may not occur. Additional risks and uncertainties are
set forth in the Company's Annual Report on Form 10-KSB for the fiscal year
ended May 31, 2008 and the Company's Quarterly Report on Form 10-Q for the third
fiscal quarter ended February 28, 2009. The Company undertakes no obligation to
publicly release the result of any revisions to these forward-looking statements
that may be made to reflect events or circumstances after the date hereof, or to
reflect the occurrence of unanticipated events or changes in the Company's plans
or expectations.
Contact:
SpongeTech® Delivery Systems,
Inc.
Investor Relations
info@spongetech.com
1-877-776-6438