About Spongetech (OTCBB: SPNG)

SpongeTech® Delivery Systems Inc. (OTCBB: SPNG) designs, produces, markets and distributes cleaning products for vehicular use. The Company has a patented technology based on sponges that contain hydrophilic (liquid absorbing) foam polyurethane matrices. SPNG's sponges are specially configured with an outer contact layer and an inner matrix, which is loaded with custom formulated soaps and waxes that are released when the sponge is applied to a surface.

At present, the Company's product line focuses on vehicular cleaning uses. However, SPNG is applying its patented technology to the development of sponges for additional applications, including sponges with anti-bacterial, bath and kitchen soaps for household uses, as well as a children's bath foam sponge.

During FY 2008, SPNG reported robust growth with revenues approaching $5.5 million. The sales gain is attributable to an expanded marketing campaign, including sales from the Web site. Going forward, the Company continues to experience strong demand in the United States and abroad, and is entering FY 2009 with order backlog in a $27 million range. 

The Market For SpongeTech

A business model capitalizing on innovative product offering
SPNG manufactures and distributes specially configured sponges containing an outer contact layer and an inner matrix, which is loaded with formulated soaps or soap and wax. When the sponge is applied to a surface with minimal pressure, the soap is applied to the surface. When the sponge is not in use, the hydrophilic matrix contains the soap and prevents leeching.

Product characteristics drive rapid adoption
SPNG's technology offers significant cost savings to consumers since the wash and wax are built into the sponge; the consumer doesn't need to purchase these products separately. In addition, the Company's sponges are biodegradable, gentle enough for all surfaces, yet tough enough to remove stubborn dirt. SPNG's automotive/vehicle sponge was named one of the seven best new products at the Automotive Aftermarket Product Expo in Las Vegas this year.

Robust revenue growth evidences strong product demand
During FY 2008, SPNG reported robust sales growth with revenue approaching $5.5 million, up from $0.06 million in FY 2007. An expanded marketing campaign, development of sales from the Web site and extended distribution channels fueled FY 2008 sales growth. The Company continues to report strong interest from U.S. and international buyers and enters FY 2009 with confirmed order backlog in a $27 million range. 

Product line extension broaden revenue potential
The Company's primary product line has been designed for automotive/vehicle applications, including boats, airplanes, ATVs, jet skis and motorcycles. SPNG also markets Uncle Norman's™ Pet Sponge, designed for use with dogs, cats and other pets. Additional applications are in development. These include anti-bacterial, kitchen and bath cleaners and a unique foaming bath sponge for children.

Effective marketing campaign accelerates growth pace
During FY 2008, SPNG significantly expanded its sales and marketing, began airing a TV commercial for its auto wash & wax system, and produced a new commercial for the Pet Sponge Care Kit. The commercials are expected to run through February 2010 in all 50 U.S. states. SPNG's commercials will air on LOGO, Inspiration, Hallmark Movie Channel, Discovery Science, NBATV, ESPN University, CBS College Sports, Sports New England, Sports Mid-Atlantic, Sports South, Fox Sports Pittsburgh, Fox Sports Southwest, and other cable and satellite TV channels.

The Company has also signed advertising agreements with several magazines and retailer catalogs, including Eastwood Co Automotive, JC Whitney, Mid-America Motorworks, Publisher's Clearinghouse, Quadratec Essentials for Jeep, Speedgear, Doubleday Military Book Club, Handyman Club of America, Carol Wright, Heartland America, Overstock.com, Reiman Country Store, Seventh Avenue, Fingerhut and Cabela's Catalog. This campaign complements SPNG's ongoing radio and TV advertising on WFAN-AM Radio, SportsNet New York, BusinessTalkRadio and LifestyleTalkRadio.

Other promotional agreements include sponsorship by the New York Yankees and New York Mets and promotions on QVC's "Keep It Clean" broadcast and on The Price is Right Game Show Prime Time Specials.

Large purchase orders from major U.S. and Latin America retailers
The Company is in discussions with several major retailers who are evaluating and test marketing its products. SPNG is also negotiating with a major supplier of brand name household cleaning products.

The Company has secured several orders, which together exceed $11 million, from well-known chain stores. SPNG received initial orders totaling $4.95 million from Winn Dixie, Ollie's, and Price Chopper, as well as Wal-Mart Mexico and Wal-Mart South America. The second order from Wal-Mart South America totaled $2.25 million and is scheduled for December 2008 delivery. A third order totaled $4.16 million and will ship to South America in January 2009. 
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Recent News From Spongetech

Press Release Source: Spongetech Delivery Systems Inc.
Wednesday August 13, 7:00 am ET

DALLAS--(BUSINESS WIRE)--Spongetech Delivery Systems Inc. (OTCBB: SPNG - News) has been rated Speculative Buy with a price target of $0.19 by Beacon Analyst, Victor Sula, Ph.D.

The full report is available at http://www.beaconequity.com/adpages/SPNG

Anyone interested in receiving alerts regarding SPNG research should e-mail members@beaconequity.com with “SPNG” in the subject line.

In the report, the analyst writes, “SPNG expects to report fourth-quarter revenues approaching $3.9 million and enters FY 2009 with confirmed order backlog exceeding $27 million … We estimate revenues will reach $5.5 million in FY 2008 and $28.2 million in FY 2009. Going forward, we expect SPNG to maintain 30% average annual longer-term growth as it introduces new products through major U.S. retailers and rapidly penetrates key international markets.” MORE

NEW YORK, Aug. 12 /PRNewswire-FirstCall/ -- SpongeTech® Delivery Systems, Inc. (OTC Bulletin Board: SPNG - News) is pleased to announce that its CEO and President, Michael Metter, will be interviewed today on Steve Crowley's American Scene Radio Show at 9:42 a.m. EDT. The interview can be heard live on BusinessTalkRadioNetwork® affiliate radio stations streamed on its website, www.businesstalkradio.net. You can find local radio stations by accessing the website, as well. Mr. Metter will be scheduled for future interviews on American Scene, where he will keep listeners updated on SpongeTech®'s products and developments.

For more information, please contact Investor Relations at 1-877-SPONGE-T, and/or visit the Company's website at: www.spongetech.com. MORE

NEW YORK, Aug. 12 /PRNewswire-FirstCall/ -- SpongeTech® Delivery Systems, Inc. (OTC Bulletin Board: SPNG - News) President and CEO of SpongeTech®, Michael L. Metter, states, "The last audited financials for our 2007 fiscal year, which ended May 30, 2007, shows very clearly that we did under $100,000 in revenue. The 2008 year that has just ended May 31, 2008, which we will be reporting on shortly, will show in excess of $5.3 million and will be very profitable. Respectfully, what bank, or investment-banking source, would lend us significant capital to grow our business with such a short track record without major dilution, especially with the horrible credit crunch that the American economy has suffered over the last eight months? The officers, directors, and key investors of SpongeTech® have lent the business, interest free, approximately $5 million. SpongeTech®, as our numbers will confirm, will grow rapidly during the 2009 fiscal year, and we are right on target to meet or even exceed projections in excess of $30 million. We are growing SpongeTech® for all our shareholders and, as we have stated in a recent 8K Filing, we expect to buy back the stock that has been issued for financing and advertising purposes within 18 months. These shares are definitely restricted and cannot be sold. I hope this answers some of the questions that have been directed to the company. I want to thank all shareholders for their continued support." Sincerely, Michael L. Metter, President and CEO SpongeTech® Delivery Systems, Inc.  MORE
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Financial Highlights for Spongetech

Company Contacts

Spongetech Delivery Systems Inc.
The Empire State Building
350 Fifth Avenue
Suite 2204
New York, NY 10118
 Phone: (212) 594-4175

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 Investor Relations
Bill Young, 877-776-6438
info@spongetech.com
 

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