Dow Jones 13314.57 -57.15 5:17 am PST, December 4, 2007 NASDAQ 2637.13 +0.00 For info, visit access.smallcapnetwork.com S & P 500 1472.42 +0.00 Change your subscription status here Russell 2000 759.97 +0.00 VOLUME 07 : ISSUE 113 Spongetech: Shorts & Longs Set to Face Off? Good news from Spongetech Delivery Systems Inc. (OTCBB: SPNG) this morning, and perhaps some even better news about a potential short-covering rally for the stock. More on that in a second.  First up, Spongetech's trademark has officially been approved by the U.S Patent and Trademark Office. The company wasn't particularly worried about someone else stepping in and using the name prior to the product's proliferation, but now with the company starting to rack up a lot of distribution, that layer of protection will be important.  Not to turn this into a lesson on legality, but a trademark is technically a sign, name, logo, or combination of all three that allows its owner sole use of it. In other words, now nobody else can package up a sponge and put the word 'Spongetech' on it. Score one for Spongetech's longevity.  The next step for the company is securing patents on the technology behind the specialty sponge....something different than a trademark. A patent is the exclusive right to use or license any new and useful process, machine, method of manufacture, composition, or any useful improvement of the same. In Spongetech's case, the sponge itself (all facets of it) is what they'll be looking to protect. I don't know what the timeframe is on the patent(s), though I suspect we'll be hearing about them soon.  I don't want to overstate the importance of the trademark. On the other hand, I don't want to understate it either. The more dollars the company does in business, the more valuable the name becomes. In that regard, protection is necessary - particularly from some big company with deep pockets who see the idea and want to copy it. But, it's only part of the equation.  The most important piece of the puzzle is still sales and profits - something I don't think Spongetech is going to have a problem with either. If you missed Friday's overview and forecast, be sure to click here. Impressive stuff.  The full press release is below. Now about this short interest business...    It's Just a Theory, But...  The prior two trading days (Friday and Monday) have been a roller coaster. We were thrilled to see SPNG open at 5.5 cents on Friday, and see it close out at 6 cents. It also happened to be the highest volume 'up' day ever for the company, so we were feeling pretty good.  Well, what happened yesterday made Friday's volume look like peanuts. More importantly, it may have exposed a very interesting - and perhaps very bullish - situation.  Before I even begin to try and explain the last couple of days, I do want to let you know it's the kind of thing that will never 'officially' show up on a 10Q. It may never be confirmed or even addressed by the company or major shareholders. For that reason, I'm not always a big fan of even opening these cans of worms and mentioning something that can't be substantiated. When the premise makes sense though, I don't mind voicing the possibility as just that - a possibility.  Prior to our launch of Friday's profile, it was our understanding there was a substantial amount of short interest in SPNG shares. In some cases this can weigh in on stocks, but more often than not it's actually a positive situation - it can force all those short holders to 'buy' the stock when they need to cover a trade that's moving against them. You might recall we scored big with Overstock.com (NASDAQ: OSTK) back in September based on this idea, called a 'short squeeze'. The thing is, it's not always easy to distinguish between general 'buying' and 'short-covering'. We may have seen a little of both on Friday. After all, it was the highest bullish volume day ever for the company. About 2.2 million shares were transacted on the heels of a very nice gain.  So how in the world did shares slide back down to a low of 3.5 cents on Monday after such a great push on Friday? I believe it was the short sellers trying to regain control. If it was me in a short trade and I saw Friday's action, I know I'd be scrambling.  If that's what it was though, it wasn't enough. Despite the fact that 1.7 million shares were sold in the first part of the day and drove shares lower, it just wasn't enough to keep them down. More than five million shares were bought once the low of 3.5 cents was hit, pushing shares back up to their close of 5 cents.  Who do you think that was doing all the buying? I'm sure there were a few value seekers in there, but I have to think it was a lot of short covering - it was just an unusually large shift in volume as well as momentum. If I'm right, these guys ran out of shares to sell, or capital (or both), and finished out the day running backwards on their heels. I suspect they may have missed one key factor....there are nearly 50 million shares issued and outstanding, but only about 1/4 of them are free trading - the rest are restricted. The smaller active float means a little buying can go a long way. And, since there have to be shares 'available' to short in the first place, they may have literally run out of willing stock 'lenders'. (Click here for the complete mechanics behind short selling.)  With that being the case, these same people may have more unfinished business to take care of today...in the form of covering more of their short positions.  Only a theory? Yeah, but I think a sound one. Look, you and I both know anything can and will happen - there's never a guarantee. If I'm wrong now, it won't be the first time. However, we've seen two late bullish efforts for the last two days, on some very abnormal volume. Ultimately I think the bulls are going to win the battle either way; I just think a heavy dose of short-covering could accelerate the victory.  Today should prove interesting.    SpongeTech(R) Delivery Systems, Inc. Announces that it Received Final Approval by U.S. Trademark office that SpongeTech(R) has now been Registered by USPTO Office in Washington, DC, for its Brand Name and the Trade-Mark of its' Logo SpongeTech(R)!!  SpongeTech(R) is Ready to become a Household Name!  NEW YORK, Dec. 4 /PRNewswire-FirstCall/ -- SpongeTech(R) Delivery Systems, Inc. (OTC Bulletin Board: SPNG - News) announces that it has received final registration for the name and the trade-mark for its' logo! Registration #: 3306073. The SpongeTech(R) name is now ready to be branded to every household! If not by its unique, environmentally friendly car care system, then by the underlying cleaning and bath products we will be supplying to you in the future with this new age delivery system.  CFO Steven Moskowitz commented, "This is the first step of the company's branding plan by getting the USPTO registration of our trademark and logo. We can now start using our branded name to bring consumer awareness and trust in our products and what we do as a company. The registration for the European Union has been filed and the Asian market is pending. Worldwide exposure to our brand logo and product are one of the long term goals that SpongeTech(R) has strived for and is succeeding. We feel that the investors and shareholders who are with SpongeTech(R) can feel confident that the first stepping stone of branding our corporate identity has been reached!!  For more information please contact Investor Relations at 1-877- SPONGE T for Bill Young or visit the company website at: http://www.spongetech.com.  About SpongeTech Delivery Systems  SpongeTech(R) Delivery Systems designs, produces, markets, and distributes cleaning products for vehicular use utilizing patented technology relating to sponges containing hydrophilic (liquid absorbing) foam polyurethane matrices. The Company's sponges are specially configured with an outer contact layer and an inner matrix, which is loaded with specially formulated soaps and wax that are released when the sponge is applied to a surface with minimal pressure. The Company's products are currently designed specifically for vehicular cleaning use. However, the Company is exploring the possibility of using its patented technology for the development of sponges for other uses, including for use with anti-bacterial, bath and kitchen soaps for household uses, as well as for use as a children's (child-safe) bath foam sponge. Each SpongeTech(R) Delivery System sponge is fully biodegradable and is designed with their cutting-edge technology and environmentally friendly.  "Safe Harbor Statement"  Under The Private Securities Litigation Reform Act of 1995: The statements in the 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 year ended December 31, 2005, the Company's Quarterly Report on Form 10-QSB for the first quarter ended March 31, 2006. 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.  SOURCE SpongeTech(R) Delivery Systems Inc.   We Value Your Feedback   Got comments, questions or suggestions? Send 'em on over: Email the Editor If you wish to send a written request or inquiry, please send it to our physical address: TGR Group, LLC 4653 Carmel Mtn Rd Suite 308 #402 San Diego, CA 92130 Did Titan Global Just Hit a Bottom? If there's one thing I've learned about our small cap stock pick Titan Global (OTCBB: TTGL), it's this...things look worst right at a bottom. The people who have had the guts to buy TTGL on a dip have been well rewarded.  What inspired the observation? Titan's chart took a beating on Friday of last week, pulling the stock from $1.72 to a low of $1.36. The beating, however, seems to have only been temporary. After reaching that multi-week low, this small cap found its way back up to a close of $1.59. On Monday we closed back at $1.67. Could Friday have been the washout day we needed to go ahead and shake off all the weakness, so we can proceed to better levels? I believe so.  There are two things leading to me to that conclusion. First, the rebound began right as the 200 day moving average line was met. Second, the rebound began right as the 61.8% Fibonacci retracement line was met. Historically, it's taken corrections of this magnitude to jump-start the bigger uptrends.  Click here to look at the chart, but be sure to keep reading.  Where'd the selling come from in the first place? They announced 2007's fiscal results on Friday. How anybody was surprised they took a loss was beyond me, but that was the initial response. However, I think the market is realizing today that it was within fiscal 2007 the company also swung to an operating profit (proof that the market isn't efficient, especially in the small cap world). If you were looking for an entry point, I think this is about as good as it might get   Is the Worst Over for Clearly Canadian? Believe me - this is anything but an encouragement to brush you back into a Clearly Canadian (OTCBB: CCBEF) position. However, it's my role to point out relevant possibilities within our small cap universe. With that in mind, I have to confess CCBEF's chart is getting me curious.  The stock's freefall is almost painful to look at - a tumble from $3.00 to lows of $0.60 in less than half of a year. And in some ways, maybe it was deserved; the company has not been putting up the kinds of results promised...a message I've delivered a few times in recent blog entries. (I'll spare you the details - just click here to find them yourself.)  But, at some point in time, reason has to kick in. This company's market cap is now about $14.8 million. For comparative purposes, they did $3.3 million in sales last quarter, and have done $7.8 million in sales for the last nine months. Annualized, this company's probably capable of maintaining the status quo and doing about $12 million in revenue per year. A price/sales ratio of 1.23? Interesting.  Now don't get me wrong...a year's worth of acquisitions seems to have done little except brought about a year's worth of disappointing results - and some dilution. But, at least the acquisitions are paid for.  I'm still not quite sure what to think, but I do know this - they have a real product right now, and have slowly been improving the top line for a few quarters.  Is it enough? Maybe. Maybe not. At 70 cents though - not to mention the fact that the chart has stopped the bleeding - I'll give the stock its due attention and put it back on my radar. It'll take a lot more than that to get it back in my portfolio, but....  Subscribe Information is power and timely information is profitable. Become informed and profit from Small Cap Network Profiles and Trading Alerts by becoming a Preferred Member today. There is no cost associated with your email subscription. 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Unsubscribe Here D I S C L A I M E R: The Small Cap Network, its website and email newsletter (hereafter, cumulatively referred to as "SCN") , is an independent electronic publication committed to providing its readers with factual information on select publicly traded companies. SCN is owned and operated by TGR Group, LLC ("TGR"). All companies are chosen on the basis of certain financial analysis and other pertinent criteria with a view toward maximizing the upside potential for investors while minimizing the downside risk, whenever possible. Moreover, as detailed below, TGR accepts compensation from third party consultants and/or companies, which it features in the publication and circulation of SCN. To the degrees enumerated herein, SCN should not be regarded as an independent publication.  Click Here or go to http://access.smallcapnetwork.com/compensation_disclosure.html to view our compensation on every company we have ever covered, or visit the following web address: http://access.smallcapnetwork.com/profile_disclosure.html for our full profiles and http://access.smallcapnetwork.com/short_term_alerts.html for Trading Alerts.  TGR Group, LLC has been paid a fee of $30,000 cash and 750,000 shares of newly issued restricted stock by Spongetech Delivery Systems Inc. for coverage of the Company.  TGR Group LLC has been paid a fee of $30,000 cash by Titan General for coverage of the company. 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