20060123 NMKT CC (unofficial) Notes
Conference Call
Monday, January 23, 2006
Start: 4:00 p.m. EST
End: Approx. 5:10 p.m. EST
NewMarket Technology is involved in three facets:
1. Systems Integration
2. Technology innovation
3. Monetizing equity appreciation (spin-offs)
Overview - Structure of the conference call
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1. Financial
a. SEC Review
b. Update of Financial
c. Increase in the Accounts Receivable
d. Preferred Stock and Debt Conversions
2. AMEX listing
a. The nature of the process that is now one (1) year old
b. The status of AMEX changes to Standard 3 requirements
c. The prospects of a reverse split to meet AMEX requirements
3. Business Relationships
a. Augustine Fund
b. Innoprise
c. VergeTech
d. Sensitron
e. RedMoon
4. Future Performance Expectations
a. Consolidated Forecast vs. Independent Business Plan
b. Expansion of the Board of Directors
c. Spin-offs
Details
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1. Financial
a. SEC Review -
** NewMarket Technology is emerging from under the Small Business designation. This elicited some inquires from the SEC. Specially, the SEC was interested in the InfoTel acquisitions and the LogiCorp acquisition.
1.) InfoTel -
** Different fiscal end of years between InfoTel and NewMarket;
** Treatment of goodwill. Goodwill was being carried at a greater value than the purchase price.;
** Carrying of the software.
2.) LogiCorp - NewMarket is in the process of "rewinding" (undoing) the acquisition costs.
b. Update of Financials -
** The financials were updated as the result of the SEC inquiry. The update had no affect on either revenues or profit.
** Research and Development - performed in acquired companies. Soon we should see R&D costs showing up in the financials.
c. Increase in the Accounts Receivable -
** Increase is related to contracts signed with the Venezuelan government
** Three phases to the Venezuelan project have so far been initiated: One in 2004 and one in 2005 where are completed. The third is ongoing and was initiated in October of 2005. This third phase is 90% completed.
** The Accounts Receivable relate to project Performance Guarantees. Once the guarantees are met then the money will be received.
d. Preferred Stock and Debt Conversions -
** The number of Outstanding Shares has increased from 50M to 100m shares. This increase was due to preferred conversion debt.
2. AMEX listing
a. The nature of the process that is now one (1) year old -
** The application was premature in its submission.
** There are no obstacles in the way.
** The company has grown beyond the small business (SB) designation. The next set of financials will drop the small business "SB" designation. (10K vs 10KSB, etc.)
b. The status of AMEX changes to Standard 3 requirements
** When the application was submitted, market capitalization and equity were the two requirements that NewMarket was applying under.
** AMEX recently eliminated "Standard 3".
** NewMarket Technology is in a "gray area" in regards to requirements for listing on AMEX.
c. The prospects of a reverse split to meet AMEX requirements -
** Phil is fighting every effort to conduct a reverse split.
** A study of companies that have performed a reverse split shows a decline in share price immediately after the R/S. Some of the successful companies have recovered their share price post-split.
** A R/S may be required for an AMEX listing, but Phil is fighting it and in discussion with AMEX about the requirements.
3. Business Relationships
a. Augustine Fund -
** The old IPVoice, pre-Phil, was in default of its loan agreement with Augustine Fund. As part of the default terms, Augustine had the right to gut the company and run it as an empty shell.
** Phil worked with Augustine Fund.
____Terms: Augustine was locked up from converting without Phil's authorization.
____At the end of 2003, the loan was fully paid off.
____New Augustine loan has a conversion rate of 12% above the investment amount.
____New loan is 2/3 paid off.
____Augustine introduced NewMarket to Defense Technology Systems (DFTS)
b. Innoprise -
** The Innoprise Fund was set up as an alternative to the predatory lending/shorting schemes that go on in the OTBCC market.
** Investors railed at Phil's involvement in the fund and the conflict of interest. As a result, the Innoprise Fund was abandoned for NewMarket funding.
c. VergeTech -
** VergeTech controls the largest single block of NewMarket Technology stock, but not 50%.
d. Sensitron -
** NewMarket still owns 20% of Sensitron.
e. RedMoon -
** Defense Technology Systems (DFTS) will purchase 26% of RedMoon from RedMoon.
** DFTS will purchase 25% of RedMoon from NewMarket Technology
** Result: DFTS will control 51% of RedMoon
4. Future Performance Expectations
a. Consolidated Forecast vs. Independent Business Plan
b. Expansion of the Board of Directors
** Phil Rauche, CFO of DFTS, should be coming to NMKT within the next 30 days.
c. Spin-offs
** The DFTS shares go to shareholders of record on July 1, 2005. But it may be updated to include other shareholders (!?)
** Next spin-off will be either NewMarket - China or Xiptel. They both has the revenues now to support it.
** Xiptel was profitable the last reporting period. They have $10M in annual sales now.
AI
