Dear Shareholder,

We want to address various questions many of you have asked over the past few weeks and to share with you our plans to grow the business and create shareholder value.

Since the beginning of fiscal 2009, we have transformed SpongeTech from an early-stage company with limited brand awareness and distribution reach to a company selling a broadened portfolio of products through multiple distribution channels supported by a host of very successful marketing campaigns and promotional activities. We are proud of the progress we've made and have many plans to continue to expand our business.

As you know, we have not yet filed our Form 10-K for our company's fiscal year 2009, which ended May 31, 2009. The requirement that caused the delay -- that our new independent auditor, Robison, Hill & Co., retained as a result of the resignation of our previous auditor, Drakeford & Drakeford, LLC, due to the revocation of Drakeford's registration by the Public Accounting Oversight Board, must re-audit our financial statements for fiscal 2008 -- is as frustrating to us as it is for you, our shareholders. While we realize it would be helpful to offer you an estimated filing date, our current independent auditors have asked us to give them the flexibility to do a thorough job, and we are working with them to complete the necessary steps as quickly as possible. We have retained Deloitte & Touche beginning with the fiscal year 2010 to serve as our accountants. We also decided to cancel our previously announced reverse stock split until after the Form 10-K for fiscal year 2009 has been filed. In the meantime, we will use this letter to bring you up to date on our many accomplishments during fiscal 2009, ended May 31, 2009,and our actions and plans to accelerate SpongeTech's growth in fiscal 2010, ending May 31, 2010.

Acquisitions/Investments

We acquired Dicon Technologies, LLC on July 9 for $4.5 million in cash plus approximately $0.5 million of working capital that we assumed upon closing the transaction to further vertically integrate SpongeTech's research, development and manufacturing processes. Dicon Technologies specializes in research and development of products derived from hydrophilic urethane chemistry.

We have agreed to invest approximately $4 million in GetFugu, a technology company focused on developing mobile search tools. Terms of the deal are being finalized and, subject to the successful completion of our due diligence, we expect to announce the completed transaction by the end of calendar 2009. Our investment resulted from GetFugu's successful customization of its mobile-based web search and e-commerce technology for SpongeTech. We plan to use GetFugu's ground-breaking, carrier-agnostic mobile phone-based technology to drive more traffic to our already-successful on-line store website, www.spongetech.com. We are currently on GetFugu's beta site.

Expanded Product Offering

We added a Child Care product line to our portfolio of reusable cleaning products for Car Care, Home Care, Medical Care and Pet Care usages.