SOURCE: NewMarket Technology, Inc.

May 24, 2007 09:53 ET

NewMarket Technology, Inc. Updates Shareholders on Financial Reporting, Independent Listings and Planned Shareholder Dividends

DALLAS, TX -- (MARKET WIRE) -- May 24, 2007 -- NewMarket Technology, Inc. (OTCBB: NMKT) (OTCBB: NMKTE) recently amended its 2006 annual report and subsequently released a financial report for the first quarter of 2007. The 2006 annual report was amended to reflect changes resulting from the amendment of a NewMarket subsidiary financial report.

Now that the delayed and amended reports are completed, NewMarket management is updating shareholders on the events that led to the amendments and delays. A letter from the CEO is included in its entirety below and at 4:30 p.m. EDT today CEO Philip Verges and CFO Phil Rauch will conduct a webcast to discuss the company's recent financial filings. The call is being webcast by Vcall and can be accessed at

Dear Fellow Shareholders:

In the fourth quarter of 2006, NewMarket executed a transaction to publicly list an operating subsidiary. The public listing of subsidiary operations is a central aspect of NewMarket's overall business strategy. The fourth quarter transaction in 2006 was the first NewMarket subsidiary to be publicly listed. As a result of the transaction, the financial results of the subsidiary are now required to be independently reported with an independent audit. At the same time the financial results of the operation are still consolidated into NewMarket's overall audit and financial report.

Improved Financial Reporting Transparency

The expanded reporting requirements improve transparency. With the details of a subsidiary operation independently reported, shareholders will have more information on operations and financial performance.

Increased Financial Reporting Workload

The increased detail likewise increases the work requirement during a very compressed timeframe. After filing the initial financial report for the first publicly listed subsidiary, NewMarket discovered an error in the report involving the accounting of an asset that had been inconsistently reported between 2005 and 2006. The effort to understand and resolve the inconsistent reporting increased our financial reporting workload. The resolution included not only the amendment of the initial subsidiary financial report, but since the subsidiary is consolidated into the parent, the NewMarket Technology annual report needed also to be amended. The workload was further increased.

The amending of two financial reports and the associated increased workload had a domino effect resulting in a number of financial reports being delayed -- the NewMarket quarterly report, the public subsidiary annual report and the public subsidiary quarterly report.

Mistaken Assignment of Delinquency Indicator to Ticker Symbol

Early this week the Company completed the backlog of financial reporting, filing the amended NewMarket Technology annual report and two current quarterly reports. In the resulting confusion of amendments and delays, NewMarket has mistakenly had an "E" assigned to its ticker symbol (OTCBB: NMKTE). However, NewMarket is not delinquent and all required filings have been filed in time to preclude the addition of an "E". We have contacted the NASD to inform them of their oversight and to have the "E" designation dropped.

Corporate Communication of Current Events

NewMarket makes a general practice of communicating extensively to shareholders. Communications include not only milestone event announcements, but also insight into what the company has in the works and how those works in progress fit into the overall plan. Over the last two months, while we have been concentrating heavily on the resolution of the subsidiary financial reporting discrepancy and reacting to the resulting domino effect, we have refrained from our ordinary communications. This slowdown in communications has resulted from 1) just not having the available time to dedicate to the ordinary level of communications and 2) waiting to complete the current financial reporting requirements so we can assess any additional impact to impending accounting requirements.

Additional Independent Listings and Dividend Distributions

NewMarket has announced a number of additional independent listings and associated dividend distributions to result from those independent listings. Each of those independent listings and dividend distributions generate various accounting, auditing and reporting requirements. The amendment activity has backlogged our accounting, auditing and reporting capacity. Now that we have caught up with annual and quarterly reporting requirements we are assessing the impact to the accounting, auditing and reporting requirements associated with our next independent listings and associated dividend distributions.

We are not backing off from any of our plans to independently list subsidiary operations, nor are we backing off from any of our dividend commitments. Timing has already been impacted as we anticipated a dividend resulting from the launch of our planned intellectual property subsidiary in the first quarter of 2007. Within the next week to ten days we will issue an update on the planned projects.

Lessons Learned

The increased workload resulting from the unplanned amendment requirements clearly tested our current accounting, auditing and reporting capacity and made it difficult for us to maintain our current commitments. Planning for unanticipated events is difficult, however, they are not unordinary. We recognize the need to increase our capacity to manage unanticipated events in a timely fashion. In other words, we need to maintain some excess or flex capacity to manage the unexpected. This is a change from our lean operations culture that resulted from our limited resources and entrepreneurial roots. We are currently addressing the necessary resource growth required for a company expanding as we are.

I extend my thanks to all the employees, lawyers, accountants and auditors that have worked long hours over the last two months to assist NewMarket through the bumpy experience of getting its first independently listed subsidiary up and running. We have learned much and those lessons will be valuable in facilitating a smoother process in our next independent listings. I would also like to give my sincere thanks to our shareholders who have experienced the bumps on our road to continued growth with us.

Best Regards,
Philip Verges
To be added to NewMarket 's corporate e-mail list for shareholders and interested investors, please send an e-mail to

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 '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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