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Pegasus Wireless Corporation (OTC BB: PGSW - http://finance.yahoo.com/q?s=PGSW.OB ) (Fri, February 22nd, 2008, 9:00am ET) NewMarket Technology, Inc. released a letter from CEO Philip M. Verges. The letter is the first in a series of letters to be released over the next few weeks to provide detailed updates on the Company's plans for acquisitions after a two year hiatus, to continue with the independent listing of subsidiaries, to issue dividends and to move to a national exchange. Highlights of NewMarket related transactions have recently been released involving the company's two subsidiaries, NewMarket China, Inc. and NewMarket Latin America, Inc. , and digiMedical Solutions, Inc., Alternet Systems, Inc. (OTC BB:ALYI), Worldwide Strategies, Inc. (OTC BB:WWSG), Pegasus Wireless Corporation (OTC BB:PGSW), and Enable IPC Corporation. The upcoming series of letters will elaborate on more details related to these transactions.
The letter is included in its entirety below:
Dear Stakeholders and All Whom Have Interest in the Small Business Market:
We launched a crusade here at NewMarket over five years ago and many of you reading this letter have played an essential role in the NewMarket crusade. After creating a technology start-up ten years ago, the NewMarket founders suffered the fate of most early stage technology companies -- a severe lack of available investment capital. By 2002, after the "dotcom bubble" burst, most early stage technology companies launched within the preceding five years closed their doors. That same year, NewMarket otherwise decided to launch our crusade to change the market's perception of investments in early stage technologies by building an entirely new business model designed to build investor confidence by improving the predictability of investment performance. NewMarket's vision is to establish a recognized, respectable and repeatable early stage technology investment scenario. NewMarket is in the business of continuously introducing new technologies to new markets.
13,000 Stakeholders Contribute to NewMarket Early Stage Technology Vision
Over 13,000 retail investors have become stakeholders in the NewMarket crusade. Over 13,000 individuals have purchased and are holding stock in NewMarket. I use the word stakeholder because purchasing stock in NewMarket makes a retail investor much more than just a shareholder in another public company. We meet with hundreds of investors and shareholders every year in public forums NewMarket conducts or participates in to share what we have learned along the crusade trail and to present the map of where we plan to go next. We publish volumes of letters, emails and press releases to reach thousands more with our message. The participation of those 13,000 stakeholders has been the heart and soul of the NewMarket crusade over the past five years.
Stakeholder Frustration; Stakeholder Passion
I have the privilege of speaking with many stakeholders every year. Sometimes the conversation is initiated around a stakeholder's frustration. NewMarket has fought numerous battles along the way. Some of which we have won and some of which we have lost. While we are winning the early stage technology investment war, we are not without our causalities and injuries from lost battles. The stakeholder frustrations I encounter almost always stem from the passion that stakeholder has for the NewMarket vision and their sense that the Company could be doing more or doing something better to realize that vision. The frustrations I encounter are more than the usual shareholder frustration resulting from less than desirable stock price performance.
NewMarket stakeholder frustrations are perhaps the best measure of NewMarket's success. Stakeholders have made the Company's vision their own. They are expressing to management what management can do to be a better custodian of the vision. I too have my own frustrations and when I hear the frustrations of another stakeholder I am delighted by the passion I know we share for the NewMarket vision.
Fundamental Financial Performance Measures of Success
In addition to the stakeholders' passion for the NewMarket vision, the Company has many additional measures of success. The Company has enjoyed tremendous growth from $1 million in reported revenue in 2002 to approximately $100 million in annualized revenue today. Unlike many early stage, fast growth technology companies, NewMarket has even managed to maintain profitability throughout its rapid growth. NewMarket's growth has been recognized by being named near the top of the Deloitte Technology Fast 500 for three years running.
Globally Positioned to Flourish Through Down Economy in North America
Futhermore, notably, NewMarket has established operations in two of the world's high growth areas, namely Latin America and Asia. NewMarket began operations overseas several years ago and has core, regional systems integration businesses well established in each of those markets. NewMarket China reported $29.5 million in revenue in 2006 and has already reported $27.9 million through the first three quarters of 2007. Latin American operations had approximately $16.5 million in revenue through the first three quarters as well. Now that China's annual GDP growth of over 10% annually and Brazil's position in the world as a prime investment area are now being recognized, NewMarket is well positioned to take advantage of the regional growth with established, core systems integration businesses in each country.
Higher Purpose; Higher Profit
Additional measures of success include NewMarket's "higher purpose" contributions to the world's developing economic regions laboring against basic resource constraints to simply establish a universal standard of living. In the course of NewMarket's crusade to build a recognized, respectable and repeatable early stage technology investment scenario, the Company has discovered the opportunity to expand this crusade into the world's developing economic regions. The world's developing economic regions regularly provide retail investors better return on investment prospects, while at the same time supporting job creation where it has otherwise been difficult. The majority of NewMarket's revenue growth has come from developing economic regions in Asia and South America where the Company has likewise created hundreds of jobs.
The OTCBB as a Pioneer in the Global Small Business Market
NewMarket has great confidence in the future of the micro-cap public markets. The Over-the-Counter Bulletin Board (OTCBB) market is a pioneer in the micro-cap public world. The OTCBB is only ten years old. While other "penny" markets may have existed before to trade the stocks of small businesses, start-ups or distressed companies, the OTCBB set out to legitimize the "penny" market through standardization, regulation, and oversight. The financial market is experiencing a global proliferation of "penny" exchanges today with initiatives underway in England, France, Germany, Singapore and China, to name only a handful of more notable markets. This proliferation is in response to the financial market's increasing awareness of the return potential from small business investments. Small business accounts for the majority of the global gross domestic product (GDP) and the majority of global employment. Even in the United States, over fifty percent (50%) of domestic GDP and employment comes from small business. The small business market space has always been a vital market segment, rich with investment potential. Now, the OTCBB is pioneering the opportunity for middle income investors to participate in and benefit from the small business market space. The rest of the world's financial markets are following the OTCBB's lead. Investment in publicly listed small businesses is growing rapidly every year.
Overcoming the Pitfalls of the OTCBB; Improving the Caliber of Participants
The OTCBB is not without its pitfalls. Most investors with experience involving OTCBB listed companies have had one or more unfortunate experiences. The potential of the OTCBB to grow into a globally recognized premier small business exchange is often masked by those unfortunate experiences. The success of the OTCBB and the public small business market at large will depend not only on the regulators ability to improve the oversight process, but even more importantly on the increased caliber of small business issuers, institutional investors, and retail investors. Any place money is exchanged will inevitably attract its fair share of society's thieves attempting to profit through deceit and scam. As the benefits of any environment where money is exchanged become more recognized, the caliber of new participants improves and in turn mitigates the efforts of society's thieves.
NewMarket's Lessons Learned and Contributions to the OTCBB
NewMarket and its 13,000 stakeholders are an example of the increasing caliber of small business public market participants. The NewMarket crusade has been active for half the life of the OTCBB. Not only are we an example of the increasing caliber of participants, we are making a contribution to the overall improvement of the market. The approximate median market cap of OTCBB listed companies is $8 million and the approximate median revenue of OTCBB listed companies is $5 million. When NewMarket started on the OTCBB over five years ago, the Company's market cap and revenue were well below the OTCBB's medians. Today, the Company's approximate $40 million market cap and $100 million in annualized revenue is well above the OTCBB medians. That progress has taught the Company many lessons about the OTCBB environment. We are making a contribution by sharing those lessons with other retail investors and other OTCBB issuers.
NewMarket's Lessons Learned and Contributions to its Stakeholders
The lessons learned are of course improving NewMarket's prospects in addition to making an overall contribution to the OTCBB at large. The specifics of NewMarket's vision to establish a recognized, respectable and repeatable early stage investment scenario include building the Company into a national exchange listed company managing a portfolio of micro-cap listed subsidiaries where subsidiary stock produces dividends for NewMarket shareholders. NewMarket's vision has never changed, though the challenges of realizing the vision have become more clear. The challenges are not insurmountable, but do require management to modify plans.
National Exchange Listing, Independent Subsidiary Listing and Dividends NewMarket has approached a national exchange listing from a few different perspectives, to include direct listings and reverse mergers. Some of these efforts have been publicly disclosed. The Company has also approached the independent listing of subsidiary operations from a few different perspectives. We have learned a number of lessons about the complexities of consolidating the financial statements of multiple public companies, in addition to the challenges of listing foreign operations on a US exchange. We are better prepared now, more than ever before, to move forward with additional independent listings. In conjunction with the challenges of executing on plans to independently list subsidiary operations, we have faced issues with plans to issue dividends to NewMarket shareholders in conjunction with the independent listing of subsidiary operations. Again, we are better prepared now, more than ever before, to move forward with issuing dividends in conjunction with the independent listing of subsidiary operations.
A Milestone Investment and the Next Step Toward the NewMarket Vision After five years of entrepreneurial growth, funded primarily through cash produced by operations and supplemented by ongoing founder investment, NewMarket established its first institutional investment relationship in the fourth quarter of last year. In conjunction with that investment, the Company recently filed its first registration statement in five years. The institutional investment is serving as a platform for the Company's next step toward realizing its vision.
First Edition in a Series of Stakeholder Letters
Over the next few weeks, I will release a series of letters to elaborate on the Company's updated plans to continue the independent listing of subsidiary companies in addition to expanding the portfolio of subsidiary companies through acquisition.
Highlights regarding NewMarket's Mobility Computing expansion and independent listing in addition to our attempt to acquire the operational assets of Pegasus Wireless Corporation have already been disclosed. Further details will be released within the upcoming series of letters elaborating on the Company's updated growth plans.
Additional acquisition initiatives and independent listing initiatives will also be released. The series of letters will include an update on the Company's plans to list on a national exchange and the Company's updated dividend plan.
NewMarket Gratitude and Commitment to Stakeholders
All of us working here at NewMarket are excited about the Company's progress to date and enthusiastic about our anticipated progress in 2008. We are grateful for the patience, feedback and support of our stakeholders. With a market capitalization value less than the book value of the Company, we understand the frustration expressed by some of our stakeholders. We welcome that frustration as an expression of every stakeholder's commitment to the NewMarket vision and corresponding desire to see the vision realized.
I have every confidence that with the execution of the updated plan, every NewMarket stakeholder will enjoy the benefit of the Company's fundamental financial value aligning with the market capitalization value. Even more substantially, I have every confidence NewMarket will continue to exemplify the best potential of the public small business marketplace through the Company's ongoing revenue growth and ongoing profitability leading to the establishment of a regular and continuous issue of shareholder dividends.
A Call to Action
I am sure many of you are investors in other publicly listed small companies. As part of NewMarket's vision and commitment to a higher purpose, I ask that you consider forwarding our letter on to the management of the other publicly listed small companies in which you invest and encourage them to contact NewMarket so we can start a dialogue to share lessons learned from our respective experiences and combine efforts to improve the market place in which we all participate.
Believe in the Small Business Marketplace,
Philip Verges
CEO
Pegasus Wireless
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