As expected, IICP is deflating...Phil & crew piled in, knowing that the fabricated revenues in the 8k filing would artificially inflate the price....now they are exiting.

Here's my complaint to the SEC

Newmarket Technology (NMKT) recently completed a reverse-merger sale of it’s a subsidiary, Newmarket China, to a publically listed shell company, Intercell International (IICP).

I believe two different securities crimes have been committed:

Crime I. Insider dealing:
1. IICP’s stock ran up in the weeks prior to the deal announcement. When the deal was announced, inexplicably, NMKT shareholders were awarded only 60% of the company. I believe NMKT insiders were in on the IICP stock, and have benefited from this deal structure.
2. Another 20% of the company (in the form of convertible preferred stock) has been given to another firm. NMKT management has refused to disclose the terms or the reasons for the give away, explaining only that the party is “a previous lender”. I believe that this party, Asia Pacific Ltd’, is controlled by NMKT insiders, and have inappropriately profited from this transaction. I also believe that NMKT and IICP are in violation of SEC 8-k requirements, for their refusal to disclose the terms of the 20% give-away.

Crime II: Revenue Fraud.

In order to boost the stock of IICP, I believe that NMKT and IICP (same management team) has engaged in the fraudulent representation of revenues. In it’s IICP 8k filing of pro-forma financial statements, NMTK represents that NMKT China started up in January 2005. During that year, they represent that the company generated $23million in revenue, and are on course to generate $23million in 2006.

1. The company (NMKT China) recorded a cost of sales of 97%. I believe the high COS was designed to minimize reported profit, which would required a reported increase in cash (which is harder to fraudulent represent).
2. The company has only $400k in cash
3. The company has only $18,000 in fixed assets. (However, the consolidated financials came up with a mysterious fixed asset addition of $400k, although IICP was a non-operating shell company)
4. The company has not made any product announcements. It’s few contract announcements have lacked details or descriptions, and involved related companies (Huali)
5. The company reports to have 100 employees, although the known lack of fixed assets makes even that number questionable.
6. The company is reporting AR of only $600,000, or about 10 days worth of sales (7 days, counting only business days)
7. Although the company was formed in Jan 2005, it was able to generate $9.2million in by June 30, 2005…a revenue rate which has not changed over subsequent periods. The lack of fluctuation, considering it covers a start up period, is dubious.
8. The company only as an SG&A expense of 2% of sales, suggesting that there are few or no employees, and no investment in sales or other overhead activities.
9. The NMKT (parent company) Dec 31, 2005 10k said that it’s subsidiary "Clipper" (NMKT China) had revenues of $13million in 2005 ....but now NMKT management is reporting that the company had $23million.
10. Despite being a start up, with 97% COS, the company has never reported a loss, or a significant profit (suggesting that the company is reporting it’s P&L in such as way as to avoid having to show an increase in cash, while still avoiding reporting a loss)

It should be noted that the management team of NMKT has a history of insider dealings. The same management team has not filed an SEC form 4,5,6 or 144 for the past 4 years, thus hiding their insider dealings.

Management has conducted a similar fraud with Defense Technology Systems (DFTS), by grossly mispresenting the business, while profiting from insider transactions.

Here's the SEC complaint that I filed regarding NMKT China:

Principals in the complaint:

Phil Verges, CEO
Hugh Robinson, NMKT Board Member
Phil Rauch, CFO
John Verges, CEO NMKT China
Pollard-Kelly Auditing Services Inc.
Rick Lutz, Investor Relations


Newmarket Technology (NMKT) recently completed a reverse-merger sale of it’s a subsidiary, Newmarket China, to a publically listed shell company, Intercell International (IICP).

I believe two different securities crimes have been committed:

Crime I. Insider dealing:
1. IICP’s stock ran up in the weeks prior to the deal announcement. When the deal was announced, inexplicably, NMKT shareholders were awarded only 60% of the company. I believe NMKT insiders were in on the IICP stock, and have benefited from this deal structure.
2. Another 20% of the company (in the form of convertible preferred stock) has been given to another firm. NMKT management has refused to disclose the terms or the reasons for the give away, explaining only that the party is “a previous lender”. I believe that this party, Asia Pacific Ltd’, is controlled by NMKT insiders, and have inappropriately profited from this transaction. I also believe that NMKT and IICP are in violation of SEC 8-k requirements, for their refusal to disclose the terms of the 20% give-away.

Crime II: Revenue Fraud.

In order to boost the stock of IICP, I believe that NMKT and IICP (same management team) has engaged in the fraudulent representation of revenues. In it’s IICP 8k filing of pro-forma financial statements, NMTK represents that NMKT China started up in January 2005. During that year, they represent that the company generated $23million in revenue, and are on course to generate $23million in 2006.

1. The company (NMKT China) recorded a cost of sales of 97%. I believe the high COS was designed to minimize reported profit, which would required a reported increase in cash (which is harder to fraudulent represent).
2. The company has only $400k in cash
3. The company has only $18,000 in fixed assets. (However, the consolidated financials came up with a mysterious fixed asset addition of $400k, although IICP was a non-operating shell company)
4. The company has not made any product announcements. It’s few contract announcements have lacked details or descriptions, and involved related companies (Huali)
5. The company reports to have 100 employees, although the known lack of fixed assets makes even that number questionable.
6. The company is reporting AR of only $600,000, or about 10 days worth of sales (7 days, counting only business days)
7. Although the company was formed in Jan 2005, it was able to generate $9.2million in by June 30, 2005…a revenue rate which has not changed over subsequent periods. The lack of fluctuation, considering it covers a start up period, is dubious.
8. The company only as an SG&A expense of 2% of sales, suggesting that there are few or no employees, and no investment in sales or other overhead activities.
9. The NMKT (parent company) Dec 31, 2005 10k said that it’s subsidiary "Clipper" (NMKT China) had revenues of $13million in 2005 ....but now NMKT management is reporting that the company had $23million.
10. Despite being a start up, with 97% COS, the company has never reported a loss, or a significant profit (suggesting that the company is reporting it’s P&L in such as way as to avoid having to show an increase in cash, while still avoiding reporting a loss)

It should be noted that the management team of NMKT has a history of insider dealings. The same management team has not filed an SEC form 4,5,6 or 144 for the past 4 years, thus hiding their insider dealings.

Management has conducted a similar fraud with Defense Technology Systems (DFTS), by grossly mispresenting the business, while profiting from

my02cents - very interesting find. And, for NMKT shareholders, very unsettling. Do you agree?

There's a pattern here of insider dealing, and of a special (and very rewarding) relationship that Augustine has with Phil. They orchestrated Phil's hiring, and now we are on the third known sweetheart Augustine deal at the expense of NMKT shareholders (DFTS, IICP, and Innoprise...although our uncovering of Phil's conflict of interest undid that). Also, there's no doubt in my mind that they are part of VTI....and therefore are reaping the windfall from the debt conversion.

This should be illegal.

Great insight my02cents - Phil is very very shy about publishing his intentions and results. Thankfully we have your super deep investigation to call him out on this very exciting stuff which he refuses to take credit for. That's our Phil. Modest to a fault.

my02cents - let's cover the accounts receivale/days sales oustanding issue one more time.

1. DSO (an indicator of uncollectble debts, or revenue fraud) went up every quarter for about 5 or 6 straight quarters, right in line with Phil increasing his revenue promises.
2. In Q4 2005, I pointed out that DSO was sky high, and a solid indicator that Phil was cooking the books.
3. DSO then started to go down. How? Because Phil is netting AR...first against accrued expense, then the following quarter against AP (in each case, AR and either accrued expense or AP went down by $5million)

There are three primary points of proof:
1. The DSO was huge (125 days)...if Phil was truthful when he said it was due to a latin america contract, then that contract must have had a worth of about $10million. There hasn't been one like that (other than the fraudulent claim in 2004 to have a $7million super secret contract).

2. NMKT engages in services, not products. Not paying AP/accrued expense means you are not paying people. Ever tried that for 6 months?

3. Unione - you and others claimed that this situation was typical for latin america. If so, then why hasn't AR DSO skyrocketed with the Unione consolidation?

At the end of the day, NMKT has few named customers....NO PRODUCTS (check the balance sheet for that one)...an employee base that does not equate to a $60million services company...a CEO who has lied to investors numerous times...and an officer crew who REFUSE to disclose their equity transactions...not to mention their insider deals, such as the VTI loan.

"The ceo has mentioned in the past that during the process the sec came in and forced AMEX to remove the waver of standards. So then the company had to meet all of the listing requirements to list. "

I would like to see this verified. The looks like another Phil/Phil lie.


I haven't listened to the call yet, but did Rauch mention why he has not filed DFTS 10k for June 30 2005? It's 11 months past the due date, and according to the other Phil, this is the only thing holding up paying the DFTS dividend.

"Lutz does get paid partial payment in stock. This better than paying him cash. "

There are two issues here:
1. It's not advisable to pay in stock...every time you do that you are permanently giving away some ownership of the company that you have invested in.

2. The stock IS BEING GRANTED AT A DISCOUNT. So, instead of paying $40k per quarter by issuing 100,000 shares (which assumes the stock price was 40cents, which it has been on average), Phil pays him the $40k in shares...but puts a value on the shares of 20cents, and therefore even more shares get issued. More dilution.

Get it?

Phis is such a drama king. Did I understand this right, that he couldn't attend the conference call because he was in Latin America? So, last time it was "we're at the fed reserve bank" (sure), and this time it's "I'm in Latin America...wayyyy to busy to attend a shareholder conference call to discuss the results of my company with investors".

No doubt that has the "Amex is just around the corner" crowd giddy.

Hiphop - there's a reason why Phil refuses to disclose the actual results of the subs. You'll see business plans and revenue run rates...but never actual results published in a 10Q or 10K. That continues the long patter of deception and retail investor manipulation.

I think someone asked if I had proof that Lutz is receiving the consulting shares. I don't care if he is or not...they are being issued quarter after quarter...at significant discounts to market....to "related parties"....obviously this is not an appropriate use of shares, nor is it appropriate to be issuing at discounts. Whoever is is on the receiving end is being unjustly compensated at shareholder expense (there's no excuse for the discount). Who would unjustly enrich themselves? Rick "The Liar" Lutz? Phil "Dont' Call Me a Liar" Verges?

"They are issued some shares to pay off some debt and services. "

You are in a strong state of denial. Let's illuminate the rest of the story:

1. The debt conversion is a debt deal that Phil issued to himself. $5million, 8% interest, convertible at 10cents per share or an 80% discount to market. Phil lied about his intention to convert...then proceeded to convert in Q1 and Q2 at an average of 20cents per share.

2. The stock for services is all being issued at significant discounts to market, to "related parties" and others (included Lutz). Why the discount to market? why not...it's not like shareholders challenge the practice...folks like Lutz and related parties may as well load up.

Phil Verges does lie, as does Lutz and Phil Rauch and the others. They also "mislead", which by my definition means that they tell only the part of a story that they want to tell.

Lies:
-April 25, 2005 letter to shareholders where Phil denied being the stock beneficiary of the convertible loan
- Lied again in a letter emailed to telephonics, posted on raging bull, where he denies that it's his intention to convert his loan some day (sure - issue yourself a $4million loan at an 80% discount to market,and you don't intend to convert)
http://www.ragingbull.lycos.com/mboard/boards.cgi?board=NMKT&read=54176
-Lied in the Dec 31 2005 10K disclosure when he intentionally hid the convertible loan disclosure.
-Lied again when he said that management can't buy back stock because of Amex
-Lied again when he said that DFTS could not authorize new shares in July 2005 without the June 2005 10k being completed
-Lies on a routine basis when he describes the revenue forecast of any given sub (proof - why does Phil continue to refuse to disclose their actual results?)
-Lies every quarter of every year when he and the other officers refuse to file their Sect 16 forms disclosing their holdings and transactions.
-Lies about Vergetech/VTI, and the number of insider transactions. Did you notice how the latest meger PR now mentions the fact that a "previous lender", now owns part of NMKT China? (anyone see those terms? of course not.)
-Xiptel is selling sofware
- Amex is still considering their application. Phil wants you to believe that this application has been active for 18 months without a decision. Sure.
-LIes in every 10Q and 10K when he says that the company is cutting back on the amount of stock issued for "consulting services", all of which is going to Lutz or someone named Verges.


The list goes on. At the end of the day, this is a company with no tangible assets, no capital investment, no R&D, a CEO who lies to investors, and who refuses to file the Sect 16 forms because he's engaging in very profitable insider transactios. Whos' the bag holder? small retail investors.

"The second agreement also provides a second class of preferred stock that represents twenty percent (20%) ownership of Intercell, but does not include dilution protection. The recipient of the second class of stock has provided past private debt financing to NewMarket China to fund business development in China."

Here we go again...this is Vergetech...so once again Phil has both hands in the cookie jar.

Big Island - read my questions to Lutz for the conf. call...that will begin to give you some idea of what you are dealing with here

Fully diluted is now up to 200million. Doesn't bother Phil thuogh, since he has already cashed in. That convertible loan deal that he gave himself was quite a deal...8% interest...convertible at 10cents per share (eventually settled for 20cents)....selling the 22million shares at an average price of 40cents (since he did, no doubt, sell into the rally to 70cents)...and you have $4million or $5million profit. Now wonder why he hid the deal, then lied about it twice to investors.

Wow...Phil has his PR spin machine going in overdrive now. No wonder why Lutz doesn't have time to answer my question "what % ownership does NMKT have in NMKT China".

Not surprising that Phil raises the revenue guidance in new PR a day after the stock price tanks on the actual results. And the letter to shareholders is riot...he mentions "emerging technology" about 20 times...yet never once has he ever given an example of a NMKT technology that's been taken to market, or will be taken. that's what you get when you have zero R&D

My02cents- that was a softball way of asking a hardball question! Let's get to the point:

Phil - you announced a management share purchase. Nothing has happened in the 7 months since:

1. Does that indicate a lack of confidence?
2. You deleted the Jan 30 PR from the website. Why?
3. YOu have represented that you can't do it because Amex asks questions. Why would Amex care? How would they know, since you refuse to file Sec 16 forms? Did you lie to investors on this matter?

That gets to the point, doesn't it? Phil would have an easy time answering your question.

Okay, and how does Clipper relate to NMKT China? Apparently Clipper has all the business, but NMTK China is bein spun off. Sounds like Phil is getting caught up in his web of constant spinning and dodging.

two more questions:

DFTS - the last we heard, in October, there was an administrative matter holding up the filing of the June 30, 2005 10K. Previously, you had explained to investors that the dividend promoted by Phil can't be funded (via add'l share authorization) until the 10k filing is completed.

1. What is the current status of your attempt to file? What was the administrative matter that has held it up?

2. Do you intend to proceed with the dividend, and how do you address the fact that the dividend declaration date is now 14 months hold?

3. What is the explanation for how Phil can take posession of DFTS convertible preferred stock, which is imposssible to convert?

Amex:
1. You filed the application 20 months ago. Do you represent to shareholders that NMKT has not been declined?

2. You say that management can't purchase stock until Amex is done, because everytime you purchase it raises questions by Amex. How can Amex know that you purchased, when management has not filed a single Sec form? What issue could Amex have with management buying it's own stock?

Thanks Lutz.

my questions...Lutz - here are my questions for the investor call. Previously, you mentioned SEC Reg FD. Apparently, not only do you have an appreciation for the letter of the law, but you embrace the intent as well. In the spirit of that, I'm sure you will find my questions highly applicable to the investor audience

1. NMKT China – in the 10Q, you refused to report the results (sales, gross margin, operating profit etc) of NMKT China, despite the fact that you are spinning it off. Why?

2. What is NMKT’s % holding of NMKT China?

3. “Clipper” is listed as representing Asia, and is accountable 36% of NMKT revenue – What is Clipper? Who owns it? How does it relate to NMKT China?

4. You continue to issue shares for consulting services, and do so at significant discounts to market. Why? Who is receiving the shares?

5. You have converted the loan that you granted yourself. How do you justify the terms? (8% interest, converted at a 50% discount to market) Why have you refused to file an 8k disclosing the terms? Why have you refused to file the Sec 16 forms for your conversion?

6. Sec 16 filings are required, to inform shareholders of officer, insider and other major shareholder equity holdings and transactions. You and the other officers have refused to file the forms. Since 2003, not a single Sec 16 form has been filed by a NMKT officer other insider. Why do you refuse to file?

7. Segment reporting: You continue to refuse to report revenue/results by operating segment. Reporting such results would allow for a comparison to the business plans that you had published, and to assess organic growth. Why do you continue to refuse to provide shareholders with this information.

8. Debt – Newmarket now has approx $15million of debt, $4million of which is due within the next year. Newmarket only has $3millioon in cash. Where did the debt come from? What is the debt schedule?(you refused to publish a commonly used table to schedule out the debt commitments)? How do you plan to finance the commitments?

Moco - you are theorizing on what happened. Why? BECAUSE PHIL REFUSES TO EXPLAIN IT. What does that tell you about management?

Neither the 8k Agreement of Sale or the 10Q disclosure mention the $250k preferred stock deal. In fact, the 8k is very clear on the acquisition terms - NMKT China sends 100% of it's stock ownership to Intercell for 2million (8%) of Intercell common stock. That's it. Sign that agreement and it's a done deal.

The $250k is spin. Think about it -

1. Why Intercell shareholders, which represent 92% of the common stock ownership and who have an agreement in hand, want to layer that on?
2. Why is there no mention in either the 8k or 10k?

The volume does support the theory. From mid-July up to the announcement date, there were a series of days at at 100k+. That's obviously all that the stock price could handle, since that caused a double (funny, for a company with ZERO REVENUE).

looking back further, there was more masstive volume in Q1 and into Q2.

Can you explain why Phil would sell NMKT China for only 8% of the common stock of the merged company, of which NMKT shareholders will only get 4%?

Interesting 10Q -
1. Phil is still issuing shares to related parties for "consulting services"
2. Phil has converted his $4.8million loan at 20.9cents per share, resuting in dilution of 21million. Phil cleared $5million - $10million on this deal, depending on when he shold the shares. That was a great deal that he gave himself.
3. DFTS is now owned 49% by NMKT
4. Fully diluted share count is now 200million
5. Outstanding sharecount is 151million, although I believe that is now up to 159million as of last week
6. PHil still refuses to disclose the results of subsidiaries. BTW, what is Clipper?
7. There's now $15million in debt on the balance sheet, of which $4million is due within 12months

Lutz has not responded to my follow up.

There is little doubt in my mind that Phil and crew piled into Intercell ahead of this deal, and structured this deal to get a windfall, similar to DFTS. Only this time, it has not gone anywhere. There's no other explanation for this deal structure, with or without the spinning that Phil and Lutz are doing.

"Rick - there is nothing preventing you from confirming:
1. The % ownership of the common stock that NMKT China holders will receive
2. The current % ownership of NMKT in NMKT China

Also, the 8k that was filed does not refer to a Preferred Shares component. In fact, the exchange terms are quite clear:

"C. Exchange of Shares. IIC and the subscribing NMC Shareholders agree that
100% of the approximately 1,000 common shares issued and outstanding of NMC
shall be exchanged with IIC for 2,000,000 shares of the common stock of IIC. The
IIC shares, on the closing date, shall be delivered ratably divided to the
individual subscribing shareholders of NMC in exchange for their NMC shares as
hereinafter set forth"

Phil is spinning this as hard as he can. I didn't do a paragraph count, but I did get a laugh out of Phil claiming to be a new R&D model (if you read the 10k, you'll realize that NMKT spends $0 on R&D).

We're also getting more spin, as he is continuing to attempt to equate majority voting rights with majority ownership:

"In a related second transaction, in exchange for $250,000, NewMarket Technology will acquire preferred stock that has majority voting rights. In other words, NewMarket Technology will become the majority shareholder of Intercell. "

Here's my follow up to Lutz:

"Rick - there is nothing preventing you from confirming:
1. The % ownership of the common stock that NMKT China holders will receive
2. The current % ownership of NMKT in NMKT China

Also, the 8k that was filed does not refer to a Preferred Shares component. In fact, the exchange terms are quite clear:

"C. Exchange of Shares. IIC and the subscribing NMC Shareholders agree that
100% of the approximately 1,000 common shares issued and outstanding of NMC
shall be exchanged with IIC for 2,000,000 shares of the common stock of IIC. The
IIC shares, on the closing date, shall be delivered ratably divided to the
individual subscribing shareholders of NMC in exchange for their NMC shares as
hereinafter set forth."

And here's Lutz, still refusing to state the common stock ownerhsip %, and the current % ownership split of NMKT China.

It's also funny that he should mention SEC disclosure requirements. This, from the company whose officers have refused to file their Sec 16 documents for four years now (thus, no one here has any idea how much stock the insiders own, or what type of transactions they have engaged in).

By the way, "part 2" (preferred shares) is not mentioned anywhere in the 8k that was filed.


"It has been made clear that this is a two step transaction with some of your
questions being answered in the second part. You may not like this
answer--but the second part of the transaction has not been consummated and,
therefore, not public as of yet. Non-public information dissemination to a
single shareholder is NOT permissable, as per Regulation FD of the SEC Code.
I think you would agree that it would not be appropriate to suggest or
mislead you into the wrong conclusions of how the second part of the
transaction is agreed upon. And it would not be appropriate to mislead the
public in general.

I can understand why you would like the full disclosure, but the company has
not completed the transaction.

SEC discosure requirements necessitated that we announce the first part of
the transaction---as there were concerns that IICPQ shareholders would have
access to non-public information and could trade on non-public information.

As always, we appreciate your support and polite feedback. We welcome your
phone calls at any time."

Here's the latest from Lutz:

A. Lutz original response:
"Please give me a call so I can answer your questions in voluminous detail."


B. And my response back:
"Voluminous detail is not required - this is a simple
> answer, that I want in writing. Example answers
> include:
>
> 1. "Newmarket will own 8% of the common stock, and
> another X% to Y% depending on the terms applied to the
> Preferred stock."
>
> 2. "Newmarket currently owns Z% of Newmarket China"
>
>
> There's the template for you. Fill in the blanks.

I've emailed a direct (and easy to answer) question to Lutz. Although the answer is obvious, many here are in denial (evidenced by the "we don't know enough" comments").



Lutz- Here is a question, which I'm sure you'll agree investors deserve to know the answer to:

Question:

What % ownership does NMKT get in the Intercell/NMKT China merger. Specifically:
A. Confirm that the common stock holdings given to NMKT China investors in exchange for NMKT China is approx 8%.

B. State the NMKT % holdings of NMKT China.

C. What is the targeted/approximate conversion value of the $250k being invested in Preferred stock, given that Intercell's current market cap is $2.5million.

The above question pertains to stock/company ownership, not voting rights. There is no need for you to create an intentionally complicated answer by confusing the two.

my02cents - this is exactly like DFTS. Phil takes a sub, which he leads you to believe has a lot of business and potential, and reverse merges it...into a total dog of a company. DFTS had $1k in cash, $4million in liabilities, no products or services, almost no revenue, and only 4 employees. Now, the combined company has no SEC filings, and a market cap that is far smaller than the $4million that Phil originally paid for DCI.

Any idea when Phil & Phil will give an update on what's going on with DFTS? Don't you feel taken on that one too?

This is the same situation...and Phil and team will once again come out on top...at teh expense of small retail shareholders.

Newmarket shareholders did not own 100% of NMKT China. It was something like 60%, although it's tough to tell when Phil does such a good job of intentionally creating confusion. So, the 2million Intercell shares will only partially be distributed to NMKT.

BTW, the Intercell agreement has 5 lines for NMKT China shareholder signatures. And, the PR mentions "Newmarket Technology and RELATED PARTY" shareholders of NMKT China. Interesting.

My02cents - Phil isn't stupid. If NMKT has a small % ownership, that's on purpose. This is another Phil Verges & Team scam, just like his loan to himself (which he hid, and lied about twice), the DFTS deal (which greatly benefited Augustine), the DFTS dividend and Amex promises, the millions of debt conversion shares to related parties, the millions of discounted shares for consulting services...the list goes on.

Who piled into Intercell in July? The one Intercell employee? No, I'm guessing it was Phil and team.

Debug - not sure what your point is. There will be 26million in common outstanding, of which NMKT will own 2million. NMKT will also purchase $250k of convertible preferred stock. The conversion terms aren't stated, but $250 = 10% of the current market cap. No matter how you spin this to rationalize Phil's deal, NMKT will own a relatively small part of th newco, given that Intercell had nothing but debt (not sure what NMKT China has though, since Phil REFUSES to disclose actual results).

I wonder if Phil will also inform investors who currently owns NMKT China. In the agreement, there are 5 shareholder signature lines. Also, in the PR, it states "Newmarket Technology and RELATED PARTIES".

Of more interest, is whether Phil and crew bought Intercell stock before the deal, and put themselves on both sides of the deal. The stock price doubled on high volume the past several weeks. Given that Phil refuses to articulate the new owernship percentage....you decided if the story fits.

"The aggregate number of shares which IIC is authorized to issue is 100,000,000 shares of common stock, of which 23,836,323 shares of such common stock are issued and outstanding"

Soon to be 25.8million....NMKT will own 2million and the legacy Intercell shareholders will own 23.8million. But don't worry, you can still outvote them. But, at the end of the day 8% of the value belongs to NMKT, and 92% to legacy Intercell shareholders.

"Maybe those 20mil shares that are currently out there was part of the price NMKT had to pay in order to buy this company.
"

That's correct. You now own 8% of NMKT China, instead of whatever it was before. The balance (92%) is in the hads of the Intercell shareholders, and that's the price you have paid for their public listing.

No doubt in my mind that Phil and crew were already on the other side (purchased Intercell stock before the deal)

Hiphop- NMKT can control the vote...but at the end of the day they only own 8% of the value of the company.

Sand - break out the calculator, and tell us what NMKT's % ownership is.

I'd love to see who was piling into Intercell at the end of July, causing the stock to double. I'm sure Lutz Verges Rauch and crew were into this....sort of like the way that Phil does loan deals with himself (then lies about it to investors)

Phil hinted at the fact that NMKT would have minimal actual ownership in Intercell (as opposed to being able to control the vote). Look at it this way, Phil can decide to sell Intercell ...since NMKT has the preferred voting rights....and NMKT would get 8% of the proceeds.

From the original PR, Phil hints at "voting control" as opposed to ownership control

"According to the agreement and plan of reorganization, all of the issued and outstanding stock of NewMarket's subsidiary, NewMarket China, will be exchanged for one hundred percent of a preferred stock to be issued by Intercell International. The preferred stock will include shareholder voting rights that represent a majority of the overall Intercell shareholder voting rights. As a result of the agreement and plan of reorganization, NewMarket China will become a wholly owned subsidiary of Intercell and NewMarket Technology will in turn become the controlling shareholder of Intercell."

I stand corrected - according to yahoo, intercell has a $2.6million market cap. At 11 cents per share, that's approx 24 million shares.

NMKT is getting 2million (but, the preferred grant will provide the voting control....although voting should not ve confused with owning).