128million shares oustanding? Wow. Now that's what I call dilution. Where's it coming from? We'll get some of that in the 10k, and the rest in the Mar 31 10Q.

Let's start taking bets...I say that he dilution resulting from debt conversion is >80% of the total, the dilution from "consulting servicee" is 10%, and the balance is from conversion of preferred shares.

Anyone else care to weigh in? The above %'s are based on historical facts....almost all of the dilution is from undisclosed debt conversion deals.

128million shares oustanding? Wow. Now that's what I call dilution. Where's it coming from? We'll get some of that in the 10k, and the rest in the Mar 31 10Q.

Let's start taking bets...I say that he dilution resulting from debt conversion is >80% of the total, the dilution from "consulting servicee" is 10%, and the balance is from conversion of preferred shares.

Anyone else care to weigh in? The above %'s are based on historical facts....almost all of the dilution is from undisclosed debt conversion deals.

Thanks Ulo. I bet you can't wait to get your hands on the DFTS dividends. This is a company with $165k in assets, who was prevented from filing a 10k due to an SEC issue, landed in the pink sheets, and chooses not to explain the non-filing to investors.

Apparently, the SEC has an asset threshhold that I didn't know about (I don't invest in companies with less than $10million in assets....).

But stepping back, I'm amazed that people here don't get it. On one hand you get excited when Phil says that DFTS is going to take on the homeland defense industry...then you turn around and gleefully point out that DFTS $165k in assets doesn't meet the SEC filing limit....and you don't connect the dots. How does DFTS, with no assets and 4 employees, have a homeland defense business????????

By the way, if you believe in your "wow, we're exempt because we are on the pinks!!!" theory, what you are also saying is that there are no plans for relisting up on the OTC....none. Have fun with that dividend.

Yes, I can explain it. He's getting the same load of BS that other investors are, and he hasn't looked into they company. I'm guessing that he sits on 20 or 30 boards. I also think that he will last less than a year.

Adding a board member such as him doesn't change the fact that this company has zero substance, engages in significant insider deals, and has a balance sheet bloated with fraud induced AR and unsupportable intangible assets.

I am greatly looking forward to the 10k. You can't hide from the facts.

my02cents
- A 10k filing is required by the SEC for any publically traded company. It's not an exchange requirement. It's an SEC requirement. DFTS hasn't filed, because they CAN'T file? Why? We have to guess, because Phil refuses to tell us.
- DFTS issued an 8k explaining the reason? The 8k in October is misleading. It's a lie. This isn't an accounting issue. That would have been solved in ....September...October...this is ....MARCH!

The truth will be known soon. Bookmark your post, so that we can compare the new story to the October 8k.

"This year they have a CFO working on the audit and that should have speeded things up a little." They sure do...the same CFO of DFTS...the subsidiary that still hasn't filed it's June 30 2005 10K. That's quite a track record.

It will be interesting to see if NMKT can file a 10k for Dec 31, given that their subsidiary DFTS is unable to file their June 30 2005 10k (probably due to an SEC investigation...although Phil refuses to acknowledge the non-filing, and explain why it can't be filed). It depends on the materiality of DFTS to NMKT. If DFTS is material, then I can see where NMKT will be unable to file a 10k.

Any theories on why Phil or Phil (Rauch..the CFO sitting on top of the DFTS mess, and now the CFO of NMKT) refuse to explain this DFTS filing issue?

Finally, a NMKT subsidiary that can actually name a client. This is what normal businesses do. The other 90% of NMKT can't name one client. Which draws into question why the AR balance is so high...because Phil's stuffing revenue?

Fire- What's the outstanding sharecount now? 120million? What have the shares been issued for? Debt conversion and consulting fees. Read the 10Q. It's not a mystery. The only mystery is where the debt is coming from in the first place.

Also, let's start a betting pool on how long an educated person like Robinson lasts on the board. Seriously.

"Do you have any evidence that Phil has issued any new shares anytime recently? IMO Phil was issuing a lot of new shares awhile back and he overdid it. Many of those shares were payable or convertible in 2005 or 2006."

Uh. Yes. The 10Q's for every quarter tell you that more and more shares are being issued. About 6million per quarter. Almost all of it to convert "debt" (most of which has never appeared on the balance sheet in the first place). Very little of it relates to the preferred shares.

"The enemy is the convertible preferred holders and short sellers. ". No, the enemy is Phil. He keeps issuing shares at significant discounts to consultants, debt holders, and himself. And he doesn't properly disclose any of it. The shares related to the preferred holders are relatively small.

Mar 31 is around the corner....

"IMO, the DFTS publishing of the SEC filings and the cleaned up balance sheet were on hold until the DCI transaction was resolved. Whether DCI were sold or not may have affected the way the SEC forms would show the revenues and expenses of DCI. "

The DCI revs would either be in the main income statement, or the "results of discontinued operations". Either way, it doesn't hold up the filing of a statement. If companies filed late because of pending acquisitions or divestitures, there would be late filings all over the place.

Email Lutz, and get him to communicate the reason for the late filing. We'll then bookmark that, and compare it to the disclosure that we'll read in the NMKT 10k. Once again, we'll find that Lutz has no problem lying to investors.

my02cents - We're talking about INTEGRITY here...integrity earned by proper communication and disclosure to investors. The SEC mandates the 10K 90 days after year end. DFTS is almost 180 days past that. And no communication to investors as to why. In all of your extended rationalization, you make it sound as if there's a strict trade off between running the business and filing the report...there's not. Most of this work is done by the auditors. Besides, 180days past the due date and that's still not enough time?

Now, do me a favor, and explain the August refiling of DFTS previous 10k. And explain it in the context of the NMKT reflings in June, which were the result of Phil playing defense on an SEC inquiry.

SEC mandates filings for all publically traded companies. The requirement has nothing to do with the exchange. On a "professional" exchange like NASDAQ or even OTC, they are quicker to enforce the SEC mandate by suspending trading from their exchange. On the other hand, the Pinks are the wild west, and nothing happens until the SEC acts. If you look up enforcement actions at the SEC website, it seems as if as much as 12 - 18 months can go by before they actually suspend a stock from trading (on any exchange).

Step back though....you are so in love with NMKT that you are defending the lack of financial disclosure to investors.

Also, this delay has nothing to do with the DCI sale. This is the June 30 2005 10K. Saying that management should focus time elsewhere (as if it is a tradeoff and you can only do one or the other), is a sure sign of "NMKT can do whatever they want I will will always support them".


If you have a minute, do some research on the SEC.gov website.

my02cents- I am amazed at what you will say in your attempts to rationalize NMKT. In this case, you are excusing DFTS for not filing a 10K. Wow.

BTW, that is an SEC requirement. If this goes long enough, trading will be suspended. Regardless of exchange

If Phil & Phil want to establish credibility (other than naming board members who seem to parrot the company line absent of any proof at all that NMKT spends funds on R&D)....they should explain why DFTS has been unable to file its June 30 2005 10k. It's almost 6 months over due.

My belief is that DFTS is under an SEC inquiry (they can't file the 10k unless the issues are cleared)....that's backed up by the restatements in August. NMKT restated in June, and that was due to an SEC inquiry (if you recall, Lutz lied to investors by suggesting the restatement was the result of Amex discussions...how's that for integrity).

My02cents - IBAS does significant R&D, and yes their engineers contribute to the operations of the network. Given that Xiptel doesn't have any equipment, network, or R&D, it's not worth trying to compare the two companies.

However, if you want to read about IBAS R&D end results, read the Q4 press releas where they discuss the routing software upgrade. Also, IBAS has been selected #1 in quality by telecom customers for 3 or 4 years in a row. Related to that, they have a self developed softare called AQR which monitors call quality, and margins.

What does Xiptel have? NOTHING! Zero. Read the financials and find out all about it.

Myo2cetns - "What R&D expense do you think Xiptel SHOULD be incurring? Xiptel does not need to "invent" anything. They just buy the components, read the owners manuals (the "R") and deploy the components (the "D")."

Wow. Sounds pretty proprietary.

Not sure why you are confused about IBAS R&D. It's pretty clear that they spend $3.5million per quarter on it, and routinely back it up with new capability announcements. That's what real companies do.

Xiptel buys equipment, because your friend says so? Show me in the financial statements where Xiptel/NMKT buys equipment. There's practically zero fixed asset purchases disclosed in the statement of cashflow, and practically zero fixed assets on the balance sheet.

My02cents - "IMO, the VTI loan should be taken back to the status of a notes payable. It doesn't have to be a convertible loan."

Why would Phil do that? He's sitting on a capital gain of about $8million. While he waits to convert this risk free investment, he's paying himself 8% interest.

I agree with you though. If Phil had the best interests of NMKT shareholders in mind, he should never have done a deal like that in the first place (it would NEVER have passed the approval of a real board or CFO). So, reverse it. Convert it to being a straight note. I think you should push this, and use it as a litmus test for Phil.

My02cents - before you get too excited about Xiptel, compare the Xiptel/NMKT balance sheet to the other companies mentioned. They hall have capital equipment (which, logically, is required to provide a VOIP service). NMTK/Xiptel doesn't have any. Nor do they have any named customers (which, given the lack of capital assets, makes sense).

He we go again with more Phil PR spin. His story line about reducing the fully diluted sharecount is histerical. First - the preferred's are NOT the issue (however, his plan to refinance them into shares of the subsidiary should be an enormous red flag to NMKT investors). Second, the issue is that Phil has issued 49million shares to convert debt (all at a steep discount to market), 12million to "consultants", an 4,900 preferred shares to convert debt that wasn't even on the balance sheet to begin with. HOWEVER, my favorite is that Phil "Let's reduce the sharecount" Verges issued himself a note convertible into....40milllion shares (at his discretion of course).

Classic doublespeak from Phil...

"As everyone has noticed by now, we have had a recent notable increase
in the
issued and outstanding. But, as I mentioned before, the increase is
partially a result of efforts to decrease the fully diluted issued and
outstanding. "

Guaranteed....this is more debt conversion and consultant fees at large discounts to market

"Phil's % of ownership of NMKK is shrinking. "

Phil took care of that. He issued himself (without disclosure to investors) a $3.8million loan convertible into 40million shares (that's 10cents per share). Actually, the loan was via VTI, of which Phil/Family own 75% and the other 25% is owned by an investor that Phil refuses to identify...so he owns about 30million of the shares.

Speaking of DFTS, why doesn't Phil Rauch, the new NMKT CFO from DFTS...tell investors why DFTS is unable to file it's June 30 2005 10k. Where's the transparency? The sense of obligation to inform investors? Let's hear it Phil and Phil....why can't it be filed? Is there an SEC investigation?

My02cents- regarding your question...."Charleio: What about Liabilities

Has PV been "stuffing" the liabilities as well?"

Yes. He has. If he only stuffed revenue...then NMKT would be enormously profitable....and would thus be expected to show a corresponding increase in cash. So, to avoid that, liabilities/expenses are stuffed as well.

my02cents - My theory on the downward "revenue run rate" projections is that Phil has been called out on his strategy of stuffing revenue/AR. The AR balance is now so large that it defies believability.

In fact, I'm going to refile my SEC complaint on that topic, as it names Pollard-Kelley Auditing Services Inc., who are currently do the "audit" (loose definition of the term, considering the previous restatements, and glaring ommissions like the $4.9million "promisory note" that was never booked as a liability before being converted via the 4.9million preferred shares).

I think you should post the facts, but post ALL of the relevant facts. Like the AR balance, inventory balance (none), equipment balance (none). Also, I can give you a table which summarizes the increases in outstanding shares per quarter (49million issued to convert debt, another 12 million issued for consulting services, all of it at a significant discount to market)

It wasn't netfone, otherwise Phil would have stated that in the Mar 2005 PR announcing the "take over of services" (whatever that means). Also, if you do a little digging on Netfone, they are the Xiptel of Canada...no substance, all PR.

If Xiptel really has capabilities (other than distributing prepaid calling cards, like TekVoice), then why don't they have any capital equipment? Why is there no R&D?

My02cents - you can add to the list that this is another fluffy/generic description of a service. No specifics (other than a reference to prepaid calling cards...which is really TekVoice's only business...but no way would that pull in the $'s that Phil is talking about). This reminds me of the $2million Xiptel announcement a year ago...."taking over the services of a telecom provider", whatever that meant.

I don't think the market is believing Phil anymore.

So, looks like Phil was compelled to issue a PR announcing a new product. That would be one of the first such announcements for NMKT ever. Apparently, the new "wireless voip" solution ....
1. Was developed without any R&D (none has been reported by NMKT during Phil's tenure)
2. No capital equipment is involved (NMKT doesn't have any).

And the home office pilot? NMKT's home office is 650 square feet. Whoa....that's the size of a garage.

The "yawn" from the market today tells me that investors are becoming more educated about the NMKT business model (spin like crazy).

Socal - yes, I do believe that someone is playing with the stock - NMKT's average volume is too significant to think that small retail investors are accounting for the majority of it. Perhaps it's a cadre of day traders, or something of the short. It's also important to remember that Phil has been issuing about 6 - 8million shares a quarter, to "consultants" and to convert some mysterious debt that seems to come out of nowhere. In the past 5 quarters, 45million shares have been issued by Phil in this manner. That's a lot of shares hitting the market. The sad part for the honest retail investor is that those shares have been issued undisclosed, and to a large discount to market.

However, that doesn't imply that I think NMKT is undervalued because of it. Afterall, NMKT doesn't have any meaningfull assets on the balance sheet (recall, I think the AR balance is fraudulent), no products or services (sure, there's something...like IT staffing...but whatever it is fall far short of Phil's description of the business to shareholders).

my02cents - 8k's are required to disclose any material events, such as issuing $3.8million loan convertible at an 80% discount to market (at the time), to a related party. If there's a poster child for 8k disclosure need, that't it.

All of Phil's equity for debt swaps require 8k disclosure, as do the origination of the loans themselves. He doesn't disclose any of that. Why?

my02cents - you say "Phil said in the conference call that Augustine "introduced" NMKT to DFTS."

Oh. And then let me guess...Phil said..."wow....no cash or current assets and $4million in liabilities...and violation of bankruptcy agreements...no defined products or services...only 4 employees two of which are clerical...PERFECT!"

Augustine told Phil to do the DFTS deal. Augustine sold out when the price spiked to 20 cents. They also seem to get more NMKT stock out of the deal (since they sold a bunch coincidentally right after the deal closed). So, Augustine is golden, while small retail investors such as yourself are left holding the bag. That's NMKT in a nutshell

"That is the year that Augustine Fund put the moves on the company to gain control. "

Oh please. You make it sound like Augustine is a predator. If that's the case, why did Phil attempt the Innoprise thing with them? Why did Phil do the DFTS deal? These two are partners.

Give up this poison pill idea. If it was poison pill, it would be triggered if someone accumulated a certain % of stock or if someone made an offer. However, it this case, Phil ALREADY owns the rights to the shares a 10cents per share.

"As far as the conversion of the note into 40 million shares of common stock, that may not be part of the terms of the note. Rather, it may be Phil's threat to use it as a posion pill if need be."

Sure. And Phil will take a pass on the $8million unrealized gain.

By the way, according to the 10k, the "blank check preferred stock" is the deterent to a take over (as if NMKT needs one when Phil and his team control most of the shares). How do you reconcile that? Also, how do you explain why Phil didn't disclose this to investors, as required in an 8k?

you can add to your list: disclosure via 8k of material finance transactions (debt conversions, debt issuance etc) as required. It's amazing that Phil can issue himself a loan convertible into 40million shares at 10cents per share, and not feel like he has to issue an 8k clearly disclosing the transactions and the terms (instead, you have to dig into the fine print of the 10k and add up serveral different sentences in different paragraphs)

my02cents- Regarding the 40million shares (not 45million) that Phil (CEO, CFO and Chairman of NMKT) gave to Phil (Only officer of VT) - You're mixing this up with other transactions (Phil did a nice attempt to hide this, so I'm not surprised).

NMKT borrowed $3.8million from VTI in Q3 adn Q4 of 2004. The $3.8million is convertible at Phil/VTI's option (had to clarify "VTI", since Phil sits on both sides of teh transaction). It's convertible into 40million shares at 10cents per share. While Phil waits to convert this NO RISK loan, he is paying himself/VTI 8% interest.

-None of this was disclosed as required by an 8k filing
-Phil lied about it in a letter to shareholders in April 2005
- PHil admitted it in an email to Telephonics posted at RB.

So, why is Phil loaning at terms far away from market? Why did he refuse to file teh 8k? Why is he raising $'s into VTI, then loaning it to NMKT?

Tech russ - You've missed the $3.8million loan to himself which is convertible into 40million shares (that would be an $8million gain today...it was $25million when he first issued the loan to himself).

Stock buy back plan? That would imply that NMKT has set aside funds committed to buying the stock.

This is yet another promise by Phil. Let's see the SEC filings when he actually buys. Until then, this will go down as another DFTS "property dividend" or Amex listing or Xiptel spin off or $75million in revenue. Afterall, how many insiders telegraph their purchases before they buy? None. When companies set aside funds, that's a disclosable event. When insiders make personal purchases, they disclose AFTER the even (in part, to optimize their purchase price).

Besides, if he was so concerned about the everyday shareholder, why did he do a convertible loan deal to himself for 10cents per share? 40million shares of dilution, and $8million unrealized gain if converted today (conversion is at his option). Why is NMKT issuing 12million shares to "consultants" at 25 cents per share. Why have 45million shares been issued to convert debt at 25cents per share (all of which is undisclosed via 8k, as required).

I've never seen a more self-profiting, misleading CEO.

Non stop entertainment - now it's Skylynx/DCI/NMKT suing each other.....

Form 8-K for SKYLYNX COMMUNICATIONS INC

27-Jan-2006

Other Events


ITEM 8.01. OTHER EVENTS

On January 24, 2006, SkyLynx Communications, Inc. (the "Company"), was served with a Summons and Petition that was filed in the District Court of Dallas County, Texas, B-44th Judicial District, Cause No. 06-00451 by New Market Technology, Inc., as plaintiff, against the Company, Digital Computer Integration Corporation ("DCI") and other parties. The factual nexus of the claims center around transactions that occurred between DCI, the plaintiff and other parties. In December, 2005, the Company announced that it had entered into a definitive Agreement and Plan of Merger to acquire DCI. In the Petition, the plaintiff asserts numerous claims against the other defendants and the Company, including claims based upon tortious interference with contract and conspiracy.

The Company believes that there is no merit in the claims against it and lacks sufficient knowledge or information upon which to form a judgment as to the meritoriousness of the claims being asserted against the other defendants. The Company intends to vigorously defend the matter.