NewMarket Technology, Inc. Publishes Business Plan 101 With Candid Investment Potential Perspective as Company Enters 4th Qtr. With Plans to Post Record Results

CEO Letter to Shareholders Details Company's Emerging Market and Innovative Technology Differentiation With Over-the-Counter Investment Strategy Case Study


DALLAS, TX--(Marketwire - October 2, 2009) - NewMarket Technology, Inc. (PINKSHEETS: NWMT) today released a letter to shareholders from CEO Philip Verges. NewMarket is a fully reporting company compliant with SEC regulations and plans to list on the OTCQX within the next 30 days as well as applying to list on the OTCBB. The Company reported $43 million in profitable revenue through the first six months of 2009 after reporting $95 million in revenue for 2008. NewMarket has forecasted $100 million in profitable revenue for 2009 and anticipates record financial results in the fourth quarter.

"We expect October to be an exciting month," said Philip Verges, CEO and Founder of NewMarket Technology, Inc. "We have implemented a number of programs and initiatives to get ready for a major kick-off in October to make the jump from over-the-counter start-up to delivering long-term returns through a national exchange listing strategy. We plan to continue growing rapidly. We plan to continue introducing new technologies and opening operations in new emerging markets. The shareholder letter today is intended to both tell you how we plan to accomplish these tasks as well as how we plan to deliver a return on investment. This is just the first of several major releases we have planned for October. Beacon Research should be releasing an analyst report on the Company shortly. Our CFO is preparing an 8-K filing on our upcoming dividend plan. These are just two examples of what we have planned for October. It's going to be an exciting month."

The shareholder letter released today is included in its entirety below.

Dear Fellow Shareholders -

NewMarket was founded in 1997 on a vision of introducing new technologies to new markets. After more than a decade of entrepreneurial evolution, I would characterize NewMarket today as an emerging market systems integrator selling a mix of brand name technologies combined with new innovative technologies.

That definition is a mouthful and has some terms that might seem vague or confusing. Let me take a few paragraphs here to break down the explanation of NewMarket's business into four basic components and explain each component. What is an emerging market? What is a systems integrator? What is a reseller? What is the Greenfield program?

Emerging Markets

An emerging market is an up-and-coming regional economy. Brazil is widely recognized as an emerging market, as is China. Most of the world outside of North America and Europe has the potential to be an emerging market. In other words, most of the world has plenty of room for economic growth. That economic growth opportunity includes plenty of room for infrastructure expansion such as new roads, new telecom transport and new water distribution and plenty of room for new jobs. With new jobs, plenty of room for increases in per capita income. In most of the world, outside of North America and Europe, the stage is set for high growth. NewMarket is looking for those emerging market regions that have the political stability and the onset of basic infrastructure ready to reasonably support rapid growth. We are in China and Brazil. We are in Central America and Southeast Asia and now we are in Africa.

Systems Integration

A systems integrator installs the information and telecommunication technologies that make business operations more efficient and more competitive. In addition to installing those technologies, a systems integrator provides maintenance on those technologies, to include the installation of periodic upgrades and the repair of inevitable system bugs. Systems integrators frequently customize commercial technology solutions to suit specific customer requirements. Systems integrators also often train people, often client employees, in the use of the technologies. EDS, Perot Systems and Affiliated Computer Systems are widely recognized systems integrators. We are similar to these companies, just smaller today and more focused on the world's emerging markets.

Reseller

The technologies installed by systems integrators are frequently the products of separate technology companies. Accordingly, systems integrators are frequently technology resellers. EDS, for instance resells hardware and software from companies such as Microsoft, Cisco and Oracle, to name only a few. Similarly, NewMarket is a reseller for many of the same brand name hardware and software companies. To be a reseller a company usually has to comply with specific qualifications set by the product company such as having some set number of engineers with certain qualifications. In addition to being a reseller for large, brand name technology product companies, NewMarket is a reseller for small technology companies with new innovative solutions. We consider the new innovative technologies we sell as a source of differentiation in the systems integration market. The new innovative technologies also often come with better sales margin potential than the large brand name products that we sell.

The Greenfield Program

The challenge with new innovative technologies is that they frequently require investment. In the past, NewMarket has been a primary investor in the innovative new technologies that we sell. We have utilized our stock to access investment for innovative new technologies. We have found over-the-counter stock a good and reliable source of accessing investment for higher risk, early stage technology opportunities. Regardless of the reliability of the over-the-counter market for accessing early stage investment, we found delivering a long-term return on our last early stage technology investment and simultaneously investing in the next early stage technology difficult, if not impossible.

Instead of seeking investment from the sale of NewMarket stock to develop innovative new technologies, we created the Greenfield program. Within the Greenfield program, we create partnerships with innovative technology companies and help them to use over-the-counter market fundraising strategies of their own. NewMarket adds value to the partner innovative technology company by being a reseller of their technology in addition to providing basic back office support. It is also our hope that the partnership will directly benefit NewMarket shareholders by providing an ongoing pipeline of high-quality early stage investment opportunities.

Milestone Investment Cycle

While an early stage investment opportunity in an over-the-counter publicly quoted company might seem simple and straight forward, the realization of a potential return can be counterintuitive. Certainly an early stage investment has an elevated degree of risk. After all, the early stage company might not make it to a later stage. However, even when an early stage company survives to a later stage, the anticipated increase in share price and the corresponding return on investment can be elusive.

In my experience, over-the-counter share prices and market capitalizations rarely correspond to fundamental financial values. Share price is sometimes higher than what might seem warranted by the financial performance and at other times, share price is lower than what might seem warranted by financial performance. As I shared in my last shareholder letter, I am not the only one with this perspective. In the September 7th issue of Forbes, in an article titled "The Hedge Fund Shuffle," Nathan Vardi, a regular Forbes contributing writer, describes penny stocks as "... shares in companies whose market values are completely disconnected from fundamentals like earnings and book value..." Regardless of the share price, the trading volume might be very low, which makes the share price, high or low, less relevant. With low trading volume, an investor might not be able to buy stock and make an investment, or sell stock in order to realize a return. I nevertheless remain a firm believer that the over-the-counter market provides a tremendous market opportunity for inventors and for entrepreneurs to source capital for early stage and higher risk investments in early stage business plans. I equally believe that the over-the-counter market is a tremendous market opportunity for retail investors to potentially enjoy a high rate of return on investments. However, I believe that inventors and entrepreneurs should plan for incremental investments in the range of $100,000 to $1,000,000 to fund their business plans and retail investors should look for optimal returns with an investment strategy that includes small investments with short horizon expectations. I refer to the framework referencing the relationship between an over-the-counter early stage business and a retail investor as the milestone investment cycle.

Milestone Investment Cycle Case Study

To further explain the milestone investment cycle and suggest a corresponding investment strategy, I will use a hypothetical example that I think you may find to have some similarities to over-the-counter investment experiences you may have had in the past. I will highlight the story of an entrepreneur and inventor that has designed a technology he believes can change the way we all work and play. He starts a company and names it the "Better Way."

To raise money to build his design into a real technology solution, he reverse merges a Better Way into an over-the-counter shell company. He then sells stock to raise his first $100k. With the first $100k he develops and demonstrates his prototype. The prototype demonstration serves as a milestone event that creates optimism amongst over-the-counter retail investors that the Better Way might truly bring a technology product into production that changes the way we all work and live. That optimism is reflected by an increased number of over-the-counter investors buying stock. The increased demand for stock results in an increased share price. However, the increased share price attracts the attention of speculators that know statistically, 60% of all start-ups do not sustain operations beyond three years. These speculators anticipate that the Better Way will just be another statistic and in-turn, the speculators look to profit from the increased share price by selling short in anticipation that the optimism will be short lived. The speculators anticipate that the increased demand will equally be short lived and that the share price will likewise decrease providing the speculator the opportunity to purchase stock at a lower price to fill the short sale made at a higher price. In fact, the short sale itself contributes to overcoming the increased demand by increasing the apparent supply of stock. In the end, the Better Way increased share price is short lived. That is until Better Way raises its next $100k and submits a patent application and the initial provisional patent drives a second milestone event that creates optimism amongst over-the-counter retail investors and the cycle begins all over again... and again and again.

An ongoing competition continues in perpetuity between optimistic investors betting on the potential of an early stage company to be one of the 40% that sustain beyond three years and the speculators betting that the early stage company is more likely to be a sixty percenter. The result is the volatile price per share ups and downs that, in my experience, are common on the over-the-counter markets. Because the price per share does not go up and stay up, Better Way has to issue more stock to raise each incremental $100k dollar investment than originally anticipated. Even if Better Way is ultimately victorious in building a successful business that sustains beyond three years and manages to actually change the way we all work and play, Better Way has issued so many shares along the way that the supply of stock may just be too great. Finding adequate demand to purchase the stock in volumes that would increase the share price to correspond with the underlying fundamental financial value may simply be too monumental.

Fixing Over-the-Counter Volatility or Adopting an Investing Strategy to Profit From Volatility

Some over-the-counter market participants claim that share price volatility and the failure of sustained increased share prices could be overcome if companies would not continuously issue stock. "Dilution" is often voiced as though it were a four letter dirty word. I believe it is not realistic to expect over-the-counter listed companies not to issue stock when the primary purpose of listing publicly is to access capital for a business plan. I frequently advise other business owners if they don't need capital for their business plan, or if they can find another source of capital for their business plan, then don't list publicly. Companies list publicly for the purpose of accessing resources for their business plan and accessing such resources results in the issue of new stock.

Other over-the-counter market participants claim that share price volatility and the failure of sustained increased share prices could be overcome if effective short sale regulations where implemented. These participants often believe that those screaming "dilution" as though it were a dirty word are actually the ones shorting the company's stock. The idea is that short sellers are causing the decrease by 1) artificially increasing the supply of stock with counterfeit stock sales and 2) creating fear, uncertainty and doubt amongst the optimistic investors with accusations and rumors directed at the management team of the subject over-the-counter company. One of those rumors includes the blame of "dilution" directed at the management team as the cause for decreasing share prices.

Early stage companies in need of capital are not likely going to stop issuing stock and short-selling regulations are not likely to change short-selling tactics any time soon. However, good early stage opportunities will continue to seek capital for their business plans by listing on the over-the-counter market and retail investors can realize a high rate of return on investment in early stage investment opportunities.

Small Investments, Short Horizons and Profits

The over-the-counter market attracts large volumes of retail investors. The over-the-counter trading volume in the U.S. markets for the month of August was nearly $11 billion. Our intent at NewMarket is to provide high-quality investment opportunities through the Greenfield program. Opportunities that provide NewMarket with a high potential for generating high margin systems integration contracts, while at the same time providing NewMarket shareholders with an additional opportunity for a high potential rate of return on investment. We want to improve that opportunity by shedding light on what we see as the stock trading dynamic on the over-the-counter markets. We are communicating to you what we see is the framework of what we are calling the milestone investing cycle. The over-the-counter trading volume would not generate $11 billion in a single month, if retail investors were not at least occasionally enjoying a periodic return on investment. With the Greenfield program and the milestone investing cycle framework, we would like to see investors in the NewMarket family of companies enjoying more consistent and regular returns. We hope this information can help investors adopt investing strategies that optimize profits within the milestone investing cycle. We believe the over-the-counter market can generate attractive returns on small investments with return horizons that parallel the milestone cycle.

Long Term Investments

The milestone investing cycle framework does not mean we do not believe in a long-term return on investment potential in the over-the-counter market. On the contrary, we want to believe all of the NewMarket family of companies and Greenfield partners will make it into the forty percentile. We want all our companies and partners to make it past the statistical three year sustainability hurdle and become a company that changes the way we all work and play. However, we believe the milestone investment cycle framework provides an opportunity for a return on investment even if a company is overcome by statistics and one of our companies or partners does not make it past the three year sustainability barrier. Most over-the-counter companies will have some milestone successes and create milestone returns even if they don't make it past the three year sustainability barrier. If one of our companies or partners succeeds past the three year barrier, than they have the potential to deliver milestone returns and a long-term return. We will continue in our diligent efforts to help them deliver both.

Best Regards,
Philip
Philip Verges
CEO and Founder
NewMarket Technology, Inc.

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About NewMarket Technology, Inc. (www.newmarkettechnology.com)

NewMarket is a reporting company with audited financial reports filed with the SEC. NewMarket provides systems integration, technology infrastructure services and emerging technology worldwide. NewMarket has a focus on providing technology and support services to rapidly growing economies where technology purchasing is on the rise. In addition to its base of operations in North America, NewMarket has operations today in the growing economies of China, Southeast Asia, Brazil and Northern Latin America. Last year the Company reported over $40 million in revenue from Asia and over $20 million in revenue from Latin America. Overall, NewMarket reported over $95 million in revenue for 2008.

Across the globe, NewMarket is a Microsoft and Oracle partner, distributes various computer hardware and peripherals from brand partners such as Dell, HP, IBM, Cisco, Sony, Epson, Canon and Sanyo and is also an authorized reseller of operating systems and various software from companies such as Red Hat, Sybase, IBM, BEA, Veritas and others. Additionally, the Company works with emerging technologies such as mobile computing, various security and wireless broadband technologies.

NewMarket's rapid growth since 2002 has placed the Company on the Deloitte Technology Fast 500 for 5 consecutive years. NewMarket was recognized as the third fastest growing technology company in the United States in 2006 and the number one fastest growing technology company in North Texas for two years in a row.

"SAFE HARBOR STATEMENT" UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

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.

Contact Information: Contact: NewMarket Technology, Inc. Investor Relations 214-722-3065 ir@newmarkettechnology.com