Dow Jones 13311.73 +22.28 4:21 am PST, November 30, 2007 NASDAQ 2668.13 +0.00 For info, visit access.smallcapnetwork.com S & P 500 1469.72 +0.00 Change your subscription status here Russell 2000 766.06 +0.00 VOLUME 07 : ISSUE 112 Spongetech Set To 'Clean Up' In More Ways Than One  Company Name: Spongetech Delivery Systems Inc. Stock Symbol : SPNG Coverage Initiated: November 30th , 2007 Current Price: $0.05 Average Volume: 730,500 52 Week Range: $0.03 - $0.10 Suggested Target: $0.12 Suggested Stop: $0.05 I love the end of the year. It's usually a great time for stocks, and particularly strong for small caps. I think December of 2007 could be even better than usual for small caps, thanks to a healthy pullback in November. If it was also around this time of year I found a company with a market cap about 1/6 the size of its back-logged orders, I'd be more than a little interested. Why? In my trading experience, those names often pose much less risk than most other small stocks because they've not yet fully matured based on their underlying fundamentals. Yet, they still provide a real possibility for above average returns.  Or in simpler terms, I'd consider it one of those rare 'alignments of the planets.' Of course, I only have a chance at making any money if I have the guts and foresight to actually be in the small cap market when I see a stock like that.  Well fellow investors, the Small Cap Network has uncovered what we feel is another incredible opportunity with such a description....an undervalued company in a potentially bullish environment. The kicker is, the company already has enough revenue lined up for 2008 to support what I think should be a stock valuation as much as ten times what it is now. With this in mind, I strongly suggest you read on...  The company is called Spongetech Delivery Systems (OTCBB: SPNG). They've designed and started to market an ingenious cleaning product - the kind you see on TV or in the store and say "I wish I had thought of that." You'll see exactly what I'm so excited about in a second...the numbers are astounding.    Brilliantly Simple Product I've been in this business for a while now, and if there's one thing I've learned it's this - tangible things are easier to sell than concepts. In Spongetech's case, the company's real revenue-bearing product has obvious marketable benefits. Basically, Spongetech makes specialty auto-wash sponges designed to dispense soap and/or wax held within the fibers of the sponge. Each sponge is good for several washes, and can then be replaced with a new one for only a few bucks. (Read 'renewable revenue'.)  Too simple of a product to draw any consumer interest? I can't say the thought didn't run through my head, but then I really started thinking about what all I have to do just to get my own car washed, or even waxed, on the rare occasions when I do it. In addition to the water and bucket I'd need to supply no matter what, I then have to find my car-wash soap....if I have any. Then I have to find my car wax....if I have any. Then I have to find my wash cloth or a soft sponge....if I can. Then I have to mix the soap/water solution myself. And if I want to do a really nice wax job, I have wait for the car to dry or dry it myself, and then bust my hands and elbows putting my separate wax product on afterwards.  Or, I can just get a Spongetech sponge and not worry about all the other steps. In the end, my bottom line cost is about the same either way.  All of a sudden the product looks pretty darn attractive, doesn't it?  Spongetech is also exploring several other applications for its unique sponge technology. The immediately-obvious uses for a soap-filled sponge are in bathrooms and kitchens, but the company is also working on a children's bath sponge. In other words, shareholders may end up benefiting from three distinct revenue paths rather than just one.    It's All About The Benjamins  Yes it's a novel product idea, but I'm under no illusion about why any of us invest - we want to grow our portfolios as much as possible relative to the risks we take. That's why it's ultimately about 'the numbers' when it comes to a company's long-term profitability plan. With that in mind, I think you're going to love Spongetech fiscal projections.  (I'll go ahead and let you know some of the now-and-later differences may look like typos, but they're not. The company wasn't operating at its current capacity as of the last reported quarter, and a lot of orders have rolled in since then.) For the quarter ending August 31st (their most recent complete quarter) the company did $64,000 in sales. Annualized, and assuming that's the average quarter, you'd expect full-year revenues to be about $256,000. Well try this on for size....according to today's press release, Spongetech has a sales backlog of $14 million for the next twelve months (between Q4 of 2007 and the end of Q3 2008). That's only a mere 5369% improvement on last quarter's annualized revenue production.  How does a company do that? E-commerce and amore distributors are a couple of ways Spongetech did it, but trade shows have been huge new-business builders - as we learned just a few moments ago. Spongetech's attendance at the Las Vegas trade show earlier in the month led to $1.38 million in new orders....from just one show. The press release is below. Spongetech plans to present their goods at even more trade shows in 2008. (And can you blame them?)  The piece de'resistance, however, is the new infomercial and its fortunate timing. If you haven't seen it yet, you probably will soon. The expected sales results over the next 18 months from this TV-marketing venue were in the $20 million range...before the television writer's strike. Somehow as a result of the strike, Spongetech is slated to get three times the amount of airtime they had originally bought for the infomercial, though it didn't cost them one penny more.  And profitability? That's the really exciting part. The $64K they did in sponge sales last quarter cost them only $13K, meaning they grossed about $51,000, or 79%. Granted there's going to always be marketing and administration expenses, but the company runs very lean in terms of staff, and even leaner in terms of payroll.   Nailing Down A Target This company's report card so far has all A's, and its capitalization is no different. There are no lingering warrants or options out there like ticking time-bombs. The management team put up the initial money, out of their own pockets, and they want the same thing every other investor would want - a higher stock price. There are presently 46.8 million of those shares issued and outstanding, which brings us to our final point... At 5 cents per share, this company's market cap is an incredibly low $2.34 million. No you didn't read that wrong....a company that's looking at $14 million in sales orders (on the low end) for the next twelve months is valued - or should I say undervalued - at $2.34 million. Just for perspective, a typical company doing about $14 million in annual sales would be priced with a market cap somewhere around $28 million. SPNG's is about a tenth of that. That's a phenomenally low entry opportunity for fans of Spongetech's potential, which could make your percentage return on a rally far greater than most anybody else's.  We're suggesting an initial target of 12 cents for SPNG, where the recent peaks came. In some regards that's a lot (a 200% return), but relative to the kind of sales totals on the table, I think it's actually still low. I'll also suggest not stepping in at a level greater than 6 cents for the time being...if you have that luxury. Check the blog early today in case we publish some perspective on the issue.  As for a suggested stop, 2 cents looks appropriate, or 2.5 cents if your trading platform can handle decimals.  So what's the downside in owing a piece of Spongetech? That's kind of the point...if there's a significant one, I sure can't see it. I just think the rest of the market doesn't see the upside yet. I see it though. Given the low cost of goods sold alongside the kind of volume increase we're now looking for, I think a swing to profitability could occur within the next few quarters.  I wish there was some awe-inspiring conclusion I could make here, but frankly, I think the story speaks for itself. I know after digging into this company's fundamentals, I was blown away by the numbers.  What you do with those numbers is up to you, but let's face it - Spongetech is a pretty straight-forward opportunity. There's a real product that can drive real revenues right now, so the risks and rewards shouldn't be too hard to grasp. I believe when it's all said and done six to twelve months down the road, we may all look back on this one and chalk it up as a no brainer.    SpongeTech Delivery Systems, Inc. $1.38 Million in Orders World Wide from the Trade Shows in Las Vegas!  $1,381,500 orders from Amsterdam, Dubai, Canada, Panama and USA!!  NEW YORK, Nov. 30 /PRNewswire-FirstCall/-- SpongeTech Delivery Systems, Inc. (OTC Bulletin Board: SPNG) announced today $1,381,562.50 in orders came in since the beginning of the month from the Las Vegas trade shows. The company received world wide orders from countries like Amsterdam, Dubai, Canada, Panama, and, of course, the USA. The company now has approximately $14 million in orders with shipping dates to customers over the next 12 months. The company shipped approximately $300,000 in orders, 9/01/07 - 11/30/07, this quarter only.  Steven Moskowitz, of SpongeTech Delivery Systems, stated "The SEMA / AAPEX Show in Las Vegas last month was a great show. We received close to $1.4 million for new products from countries world-wide. I was at the show and spoke to so many international buyers myself. I think we could see more orders coming in over the next few months, especially after we start integrating their company's products into our sponge technology. This is a nice 'thank you' to the investors and shareholders who have stayed with the company when we were getting started." Mr. Moskowitz also added, "We truly are a world-wide company! We have definitely forged ahead with our environmentally-safe products and look forward to continuing. SpongeTech, we are proud to say, is helping in the Green campaign by allowing our customers to 'Go Green' every month!"  For more information please contact Investor Relations at 1-877- SPONGE T and ask for Bill Young, or visit the company website at: www.spongetech.com.  About SpongeTech Delivery Systems  SpongeTech Delivery Systems is a development stage company which 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 bath foam sponge. "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. Contact:  SpongeTech Delivery Systems, Inc.  Investor Relations:  Bill Young, 1-877-776-6438  wayoung55@aol.com.  Source: SpongeTech 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 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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