SOURCE: NewMarket Technology, Inc.

May 03, 2007 09:28 ET

NewMarket Technology, Inc. Resolves Subsidiary Reporting Discrepancy and Issues Update on Pending 2006 Annual Report Amendment With Anticipated 10% Net Income Increase

Subsidiary Issues Amended SEC Filing to Rectify Previous Asset Recognition Discrepancy

DALLAS, TX -- (MARKET WIRE) -- May 3, 2007 -- NewMarket Technology, Inc. (OTCBB: NMKT) today announced a resolution of the previously disclosed asset recognition discrepancy within its Chinese operating subsidiary. The Chinese operating subsidiary has filed an amendment to a previously filed financial statement that resolves the previous asset recognition discrepancy.

NewMarket China, Inc. (OTCBB: NMCHE) is an independently listed subsidiary of NewMarket Technology, Inc. On April 20, 2007 NewMarket disclosed an asset recognition discrepancy within NewMarket China operations involving an amount less than $1 million. On April 23, 2007 the Company released an open letter to shareholders providing more detail on the asset discrepancy issue. On April 25, 2007, NewMarket CEO Philip Verges and CFO Philip Rauch reviewed the asset discrepancy in a Webcast conference call in addition to providing an update on the Company's progress to resolve the issue.

NewMarket Technology CEO Philip Verges issued a follow-up letter to shareholders today to further explain the resolution of the asset recognition discrepancy and update shareholders on the related additional pending financial reports to be filed within the next few days. The letter to shareholders is contained in its entirety within this release.

Dear Fellow Shareholders -

Last week I asked for your patience while the Company resolved an asset recognition discrepancy we had discovered within our Chinese operating subsidiary. Today, I am pleased to report that the discrepancy has been resolved and disclosed in an amendment to the original SEC filing where the initial error occurred.

While the asset recognition discrepancy represented a value less than $1 million, I know this issue nevertheless tested shareholders confidence. Every day that went by further tested patience and confidence. As I stated in my letter last week, I recognize my responsibility for the reported discrepancy and sincerely express my regret for having tested shareholder patience and confidence. In spite of the long hours and dedicated efforts of a number NewMarket staff and key third party professionals, the resolution still required more time than we otherwise expected. I extend my thanks to all shareholders for their patience and continued patience.

The asset recognition discrepancy resulted in a delay of the Chinese subsidiary annual report. The filing of the annual report without the previous discrepancy resolved would have perpetuated the error. Now that the issue is resolved, we can proceed with filing the annual report for the Chinese subsidiary (NewMarket China, Inc.) on SEC Form 10Ksb. Shareholders can anticipate the NewMarket China annual report within days.

The resolution of the discrepancy has also made it necessary to review the previously filed NewMarket Technology, Inc. annual report filed on SEC Form 10K. The correction does impact the NewMarket Technology, Inc. financial report and an amendment to that report is pending. The amended annual report will include a small number of minor adjustments, however the pending amended annual report will include an anticipated 10% increase to previously reported net income. The NewMarket Technology amended annual report will be filed promptly after the NewMarket China annual report is filed.

Considering the unfortunate course of events surrounding the timely reporting of NewMarket's 2006 Annual Report, I imagine shareholders are concerned about the timely filing of the upcoming first quarter results. There is no current intention or need to extend the first quarter reporting period. NewMarket Technology, Inc. and NewMarket China, Inc. have every intention of filing the quarterly reports on time.

2006 was a solid performance year for NewMarket, however we are aware our reporting delay distracted market attention from that solid performance. We are pleased to report NewMarket's 2006 financial and operational performance has been recently reviewed by third party analysts and reports from these analysts are forthcoming. These research reports have been delayed due to the delay in NewMarket's overall annual report. We anticipate the analyst reports following the filing of all pending financial reports.

Philip M. Verges
CEO & Chairman
NewMarket Technology, Inc.
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About NewMarket China, Inc. (

NewMarket China, Inc. is a leader in the rapidly developing Chinese software engineering market providing high quality outsourcing services to global customers. In addition, the firm is a systems integrator and value added reseller of major global hardware brands in the Chinese domestic market. NewMarket China has established and continues to grow a highly capable network of Chinese IT Service partners providing domain expertise in telecommunications, multimedia, ERP and finance. Headquartered in Shanghai, NewMarket China bridges the gap between Western and Eastern business cultures to realize the advantages of the high quality, low cost technology products and services available in China. In doing so, the firm assists its clients in overcoming the challenge of taking a business global. NewMarket China comprehends the differences in business processes, communications and cultures between the United States and China, and provides its clients with an established partner who provides a winning environment for global relationships and transactions. While most firms see China as merely a cost saving alternative, NewMarket China recognizes that China represents a huge growth opportunity for its customers and supports them in localizing their products and services, and in identifying complementary revenue streams within the Chinese Market.

About NewMarket Technology, Inc. (

NewMarket helps clients maintain the delicate balance between maintaining legacy systems and gaining a competitive edge from the latest technology innovations. NewMarket provides certified integration and maintenance services to support the prevailing industry standard solutions to include Microsoft, Cisco Systems, SAP, Siebel and Sun Microsystems. Concurrently, NewMarket continuously seeks to acquire undiscovered emerging technology assets to incorporate into an overall product portfolio carefully packaged to complement the prevailing industry standard solutions. NewMarket delivers its portfolio of products and services through its global network of Solution Integration subsidiaries in North America, Latin America, China and Singapore. NewMarket maximizes shareholder return on investment by independent listing of consolidated regional and emerging technology subsidiaries in order to issue subsidiary stock in shareholder dividends. NewMarket ranked Number Five on Deloitte's 2006 Technology Fast 500, a ranking of the 500 fastest growing technology, media, telecommunications and life sciences companies in North America. Rankings are based on percentage revenue growth over five years, from 2001-2005. The Company grew from less than $1 million in revenue in 2001 to over $50 million in profitable revenue in 2005.


This press release contains forward-looking statements that involve risks and uncertainties. The statements in this release are forward-looking statements that are made pursuant to safe harbor provision of the Private Securities Litigation Reform Act of 1995. Actual results, events and performance could vary materially from those contemplated by these forward-looking statements. These statements involve known and unknown risks and uncertainties, which may cause NewMarket China's actual results in future periods to differ materially from results expressed or implied by forward-looking statements. These risks and uncertainties include, among other things, product demand and market competition. You should independently investigate and fully understand all risks before making investment decisions.

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