NewMarket Technology Inc - FORM 10-Q

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EX-31.2 - EXHIBIT 31.2 - NewMarket Technology Inc	a6106463ex312.htm
EX-31.1 - EXHIBIT 31.1 - NewMarket Technology Inc	a6106463ex311.htm
EX-32.1 - EXHIBIT 32.1 - NewMarket Technology Inc	a6106463ex321.htm
EX-32.2 - EXHIBIT 32.2 - NewMarket Technology Inc	a6106463ex322.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark-One)

(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2009.

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to _________

Commission file number 000-27917

NewMarket Technology, Inc.

(Exact name of Registrant as Specified in Its Charter)

NEVADA		65-0729900
(State or other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

14860 Montfort Drive, Suite 210

Dallas, Texas 75254

(Address of Principal Executive Offices)

(972) 386-3372

(Issuer’s Telephone Number, Including Area Code)

Check whether the registrant: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X No ___

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer___ Accelerated Filer___ Non-Accelerated Filer _X

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)

Yes __ No X_

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:

As of November 23, 2009, the registrant had 18,660,375 shares of common stock outstanding.

INDEX

NEWMARKET TECHNOLOGY, INC.

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Consolidated Balance Sheets — September 30, 2009 and December 31, 2008

	Consolidated Statements of Operations — Three and Nine Months Ended September 30, 2009 and 2008

	Consolidated Statements of Cash Flows — Nine Months Ended September 30, 2009 and 2008

	Notes to Consolidated Financial Statements

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.	Quantitative and Qualitative Disclosures about Market Risk

Item 4.	Controls and Procedures


PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings

Item 1A.	Risk Factors

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.	Defaults Upon Senior Securities

Item 4.	Submission of Matters to a Vote of Security Holders

Item 5.	Other Information

Item 6.	Exhibits

SIGNATURES

CERTIFICATIONS

ITEM 1. UNAUDITED FINANCIAL STATEMENTS

NewMarket Technology, Inc.
Consolidated Balance Sheet

ASSETS	September 30, 2009			December 31, 2008
	(Unaudited)
CURRENT ASSETS
Cash and cash equivalents	$	3,714,642		$	4,960,869
Accounts receivable		21,667,741			17,974,496
Inventory		3,143,160			1,874,544
Prepaid expenses and other current assets		2,537,511			3,775,645
Total current assets		31,063,054			28,585,554

PROPERTY AND EQUIPMENT, NET		783,318			803,477

OTHER ASSETS
Notes receivable including accrued interest		4,578,574			4,958,456
Investment in unconsolidated subsidiares		1,343,916			1,311,229
Investment in restricted securities		186,112			186,112
Goodwill		15,104,379			15,104,379
Available for sale securities		364,000			294,000
Intangibles		211,419			212,277
Total other assets		21,788,400			22,066,453

Total assets	$	53,634,772		$	51,455,484

LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable	$	7,243,610		$	8,038,083
Accrued expenses and other liabilities		3,368,374			2,443,885
Customer deposits		286,667			8,909
Liabilities of discontinued operations		308,683			308,683
Long term debt, current portion		3,065,530			3,247,676
Short term debt		1,607,107			2,356,322
Total current liabilities		15,879,971			16,403,558

LONG-TERM LIABILITIES
Notes payable, net of deferred financing costs		1,428,365			1,208,980
Total long-term liabilities		1,428,365			1,208,980
Total liabilities		17,308,336			17,612,538

EQUITY
Common stock; $.001 par value; 300,000,000 shares authorized;
16,177,457 and 11,998,431 shares issued and outstanding
at September 30, 2009 and December 31, 2008, respectively		16,177			239,969
Preferred stock; $.001 par value; 10,000,000 shares authorized;
Series C 925 and 925; Series E 41 and 41; Series F 0 and
580; Series H 0 and 835; Series I 0 and 541;
Series J 2,166 and 0, and; Series K 500 and 0 shares
issued and outstanding at September 30, 2009 and
December 31, 2008, respectively		4			3
Deferred compensation		(111,250	)		(226,333	)
Additional paid-in capital		55,838,194			53,212,902
Accumulated comprehensive income		635,864			2,256,639
Accumulated Deficit		(22,112,590	)		(24,352,041	)
Total NewMarket Technology, Inc. stockholders' equity		34,266,399			31,131,139
Noncontrolling interest		2,060,037			2,711,807
Total equity		36,326,436			33,842,946

Total liabilities and equity	$	53,634,772		$	51,455,484

See accompanying notes to consolidated financial statements.

NewMarket Technology, Inc.
Consolidated Statement of Operations
(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2009			2008			2009			2008
REVENUE	$	31,707,269		$	32,379,164		$	75,581,615		$	76,069,467

COST OF SALES		25,617,769			26,217,589			61,167,080			59,092,154

Gross Margin		6,089,500			6,161,575			14,414,535			16,977,313

OPERATING EXPENSES
Selling, general and administrative expenses		4,459,612			3,719,802			10,891,740			11,400,162
Depreciation and amortization		38,228			239,172			115,567			797,357
Total expenses		4,497,840			3,958,974			11,007,307			12,197,519

Income from operations		1,591,660			2,202,601			3,407,228			4,779,794

OTHER INCOME (EXPENSE)
Interest income		128,737			204,049			396,461			538,746
Interest expense		(291,764	)		(371,198	)		(802,075	)		(731,077	)
Foreign currency transaction gain		4,543			2,801			4,737			3,509
Lawsuit settlement expense		-			(4,637	)		(20,953	)		(14,637	)
Other income/(expense)		705,027			(51,661	)		654,165			(75,023	)
Total other income (expense)		546,543			(220,646	)		232,335			(278,482	)

Net income before income tax (credit) and
noncontrolling interest		2,138,203			1,981,955			3,639,563			4,501,312
Foreign income tax		26,815			17,280			22,513			39,303
Noncontrolling interest in consolidated subsidiary		556,153			210,757			1,377,599			703,525

Net income		1,555,235			1,753,918			2,239,451			3,758,484

Other comprehensive income (loss)
Gain on available for sale securities		14,000			-			70,000			-
Foreign currency translation gain (loss)		304,725			9,138			(1,690,775	)		1,060,647

Comprehensive income	$	1,873,960		$	1,763,056		$	618,676		$	4,819,131

Income per weighted-average common share-basic	$	0.11		$	0.16		$	0.17		$	0.35
Income per weighted-average common share-diluted	$	0.08		$	0.14		$	0.12		$	0.30

Number of weighted average common shares o/s-basic		14,290,805			11,039,687			13,437,254			10,641,434
Number of weighted average common shares o/s-diluted		19,447,948			12,735,242			18,594,397			12,336,990

See accompanying notes to consolidated financial statements.

NewMarket Technology, Inc.
Consolidated Statement of Cash Flows
Nine months ended September 30,
(Unaudited)

	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	2,239,451		$	3,758,484
Adjustments to reconcile net earnings to net cash
provided (used) by operating activities:
Stock issued for services and amortization of
deferred compensation		334,883			677,180
Depreciation and amortization		115,567			797,357
Minority interest in consolidated subsidiary		1,377,599			703,525
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable		(3,692,946	)		(2,550,847	)
(Increase) decrease in inventory		(1,268,616	)		(757,979	)
(Increase) decrease in prepaid expenses		1,238,134			(291,226	)
Increase (decrease) in accounts payable		(794,473	)		779,614
Increase (decrease) in deposits		277,758			(115,954	)
Increase (decrease) in accrued expenses and other payables		924,489			(517,789	)
Net cash provided by operating activities		751,846			2,482,365

CASH FLOWS FROM INVESTING ACTIVITIES:
Notes receivables advances					(2,023,099	)
Accrued interest receivable		(375,000	)		(500,000	)
Purchase of property and equipment		(191,245	)		-
Proceeds from sale of property and equipment		-			243,932
Net cash used in investing activities		(566,245	)		(2,279,167	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on short-term borrowings		-			(283,108	)
Advances on short term credit line		(166,666	)		-
Payments on short term credit line		(749,215	)
Net cash used in financing activities		(915,881	)		(283,108	)

Effect of exchange rates on cash		(515,947	)		(327,426	)

Net decrease in cash and equivalents		(1,246,227	)		(407,336	)

CASH, beginning of period		4,960,869			5,202,244

CASH, end of period	$	3,714,642		$	4,794,908

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid in cash	$	802,075		$	371,198

Non-cash Financing Activities:
Common stock issued to settle debt	$	250,000		$	150,500
Preferred stock issued to settle debt	$	1,250,000		$	-
Common stock issued for conversion of preferred stock	$	-		$	473

NEWMARKET TECHNOLOGY, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2009

(1) BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES:

Unaudited Interim Financial Statements

The accompanying unaudited interim consolidated financial have been prepared in accordance with accounting principles generally accepted in the United States and applicable Securities and Exchange Commission (“SEC”) regulations for interim financial information. These financial statements are unaudited and, in the opinion of the management of NewMarket Technology, Inc. and its subsidiaries (“NewMarket” or the “Company”), include all adjustments necessary to present fairly the balance sheets, statements of operations and statements of cash flows for the periods presented in accordance with accounting principles generally accepted in the United States. Certain information and footnote disclosures normally found in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to SEC rules and regulations. It is presumed that users of this interim financial information have read or have access to the audited financial statements and footnote disclosure for the preceding year contained in the Company’s Annual Report on Form 10-K. Operating results for interim periods presented are not necessarily indicative or the results that may be expected for the year ending December 31, 2009.

Use of estimates

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statements of financial condition and revenues and expenses for the year then ended. Actual results may differ significantly from those estimates.

Principles of consolidation

The Company accounts for investments in affiliates and subsidiaries in accordance with Statement of Financial Accounting Standard (“SFAS”) No. 94, Consolidation of all Majority-owned Subsidiaries, and Accounting Research Bulletin (“ARB”) No. 51, Consolidated Financial Statements. The Company uses two different methods to report investments in subsidiaries and other companies: consolidation and the equity method.

Consolidation

The Company uses the consolidation method to report its investment in its subsidiaries and other companies when the Company owns a majority of the voting stock of the subsidiary. All inter-company balances and transactions have been eliminated. Infotel, the Company’s Singapore based subsidiary, has been on a September 30 fiscal year end since its inception. The Company elected, pursuant to ARB 51, to account for the operations of Infotel on a matching period to matching period with the parent’s financials. This means that should there be a significant shift in Infotel’s operations, positive or negative, it will not be reflected in the consolidated financials for an additional 90 days.

Equity Method

The Company uses the equity method to report investments in businesses where it holds 20% to 50% voting interest, but does not control operating and financial policies.

Under the equity method, the Company reports:

·	Its interest in the entity as an investment on its balance sheets, and

·	Its percentage share of earnings or losses on its statement of operations

At September 30, 2009, the Company did not record any income or loss, nor adjust its investment account, by the net income or loss of the affiliates, as the actual equity percentage paid for was the investments was less than 10%, with a concurrent de minimus net income/loss related thereto.

Fair Value Instruments

Statement of Financial Accounting Standards (“SFAS”) 157, Fair Value Measurements, defines fair value, establishes a framework for measuring fair value and expands disclosures for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. As a basis for considering assumptions, SFAS 157 established a three-tier hierarchy which prioritizes the inputs used in measuring fair value as follows:

·	Level 1 – Quoted prices for identical instruments in active markets

·	Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in non-active markets, or model-driven valuations in which all significant inputs are observable in active markets

·	Level 3 – Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions

SFAS 157 does not impose fair value measurements on items not already accounted for at fair value; it applies to other accounting pronouncements that either require or permit fair value measurements.

Certain assets and liabilities are measured at fair-value on a non-recurring basis. These assets include goodwill and intangible assets and are the result of acquisitions. Items valued using internally generated valuation techniques are classified according to the lowest level input. Thus an item may be classified as Level 3 and such instruments are not measured at fair value on a n ongoing basis but are subject to fair value adjustments in certain circumstances, for example when there is evidence of impairment.

The Company determines whether the carrying value of goodwill is impaired on an annual basis or more frequently if indications of potential impairment exist. Fair values of recorded goodwill are determined by using a discounted cash flow methodology which is based on projections of the amounts and timing of future revenues and cash flows, assumed discount rates and other assumptions and factors such as historical performance, anticipated market conditions and capital expenditure requirements, if any.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less and money market instruments to be cash equivalents.

Inventory

Inventory, which consists primarily of finished goods, is stated at the lower of cost or market. Cost is determined using the weighted average method.

Other Assets

Available-for-sale securities consist of 1.4 million shares of the common stock of VirtualHealth Technologies, Inc. These securities are carried at fair value ($364,000 at September 30, 2009) based upon quoted market prices. Unrealized gains and losses are computed on the average cost basis and are reported as a separate component of comprehensive income, included as a separate item in stockholders’ equity. Realized gains, realized losses and declines in value judged to be other-then temporary, are included in other income (expense).

Property and equipment

All property and equipment is recorded at cost and depreciated over their estimated useful lives, using the straight-line method, generally three, five or seven years. Upon sale or retirement, the costs and related accumulated depreciation are eliminated from their respective accounts, and the resulting gain or loss is included in the results of operations. Repairs and maintenance charges, which do not increase the useful lives of the assets, are charged to operations as incurred.

Net income per share

Basic net income per weighted average common share is computed by dividing the net income by the weighted average number of common shares outstanding during the period. Fully diluted includes all common shares that would be required to be issued of various convertible instruments at their stated conversion rates using the September 30, 2009, market price of the underlying common stock.

Stock compensation for services rendered

The Company issues shares of common stock in exchange for services rendered. The costs of the services are valued according to accounting principles generally accepted in the United States and are been charged to operations as earned.

Revenue recognition

As a result of the multiple acquisitions from 2003 through 2006, the Company now has three distinct revenue streams: (1) Services, principally programming services. This revenue is recognized as services are provided and billed to the customers. (2) Contract, which is principally an ongoing service revenue stream, such as training contracts, technical support contracts, etc. This form of revenue is recognized monthly as earned and billed, and (3) Product sales, which is the sale of hardware and software, generally installed. Sometimes the hardware and/or software are customized under the terms of the purchase contract. This revenue is recognized as the products are delivered and the customer accepts said products. Any portions of such contracts which may include installation, training, conversion, etc. are recognized when such services have been completed. Any ongoing support, training, etc., is separately structured and is accounted for in contract revenue and in accordance with the contracts.

Foreign Currency Transaction and Translation Gains (Losses)

The Company has operations located in the People’s Republic of China, Singapore, Venezuela, Brazil and Columbia. The Company invoices customers in the local currency, and if the Company payment is denominated in a foreign currency, the Company translates the payment and records a foreign currency transaction gain or loss in accordance with SFAS 52, Foreign Currency Translation.

Derivative Instruments

SFAS 133, Accounting for Derivative Instruments and Hedging Activities, as amended, establishes accounting and reporting standards requiring that every derivative instrument be recorded in the balance sheet as either an asset or liability measured at fair value, and that changes in fair value be recognized currently in earnings (loss) unless specific hedge accounting criteria are met.

Stock-based Compensation

The Company does not currently maintain a stock option plan for its management and employees.

Income (Loss) Per Share

SFAS 128, Earnings Per Share, requires dual presentation of basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.

Comprehensive Income

SFAS 130, Reporting Comprehensive Income, requires the reporting and display of comprehensive income and its components. SFAS 130 requires unrealized gains and losses on the Company’s available for sale securities to be included in comprehensive income as well as gains or losses due to foreign currency translation adjustments.

Recently Issued Accounting Standards

In April 2009, the FASB issued FSP SFAS No. 107-1 and Accounting Principles Board (“APB”) Opinion No. 28-1, “Interim Disclosures about Fair Value of Financial Instruments” (“FSP SFAS No. 107-1 and APB Opinion No. 28-1”). FSP SFAS No. 107-1 and APB Opinion No. 28-1 amends SFAS No. 107, “Disclosures about Fair Value of Financial Instruments” and APB Opinion No. 28, “Interim Financial Reporting,” to require disclosures about fair value of financial instruments for interim reporting periods. The adoption of FSP SFAS No. 107-1 and APB Opinion No. 28-1 for the period ended September 30, 2009 did not have a material impact on the Company’s consolidated financial statements.

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” (“SFAS No. 165”). SFAS No. 165 requires an entity to disclose the date through which the entity has evaluated subsequent events and whether that evaluation date is the date financial statements are issued. SFAS 165 is effective for interim reporting periods after June 15, 2009. The adoption of SFAS 165 did not have a material effect on the Company’s consolidated financial statements.

In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets, an Amendment of FASB Statement No. 140” (“SFAS No. 166”). SFAS No. 166 eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets, and requires additional disclosures about transfers of financial assets. SFAS No. 166 is effective for annual reporting periods after November 15 2009. The adoption of the provisions of SFAS No. 166 is not anticipated to have a material impact on the Company’s consolidated financial statements.

In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)” (“SFAS No. 167”). SFAS No. 167, among other things, requires a qualitative rather than a quantitative analysis to determine the primary beneficiary of a variable interest entity (“VIE”), amends FIN 46(R)’s consideration of related party relationships in the determination of the primary beneficiary of a VIE, requires continuous assessment of whether an enterprise is the primary beneficiary of a VIE, and requires enhanced disclosures about an enterprise’s involvement with a VIE. SFAS No. 167 is effective for annual reporting periods after November 15 2009. The adoption of the provisions of SFAS No. 167 is not anticipated to have a material impact on the Company’s consolidated financial statements.

In July 2009, the FASB issued SFAS No. 168, “FASB Accounting Standards Codification” (“SFAS No. 168”), as the single source of authoritative nongovernmental U.S. GAAP. All existing accounting standards are superseded as described in SFAS No. 168. All other accounting literature not included in the codification is non-authoritative. SFAS No. 168 is effective for interim and annual periods ending after September 15, 2009. The adoption of the provisions of SFAS No. 168 is not anticipated to have a material impact on the Company’s consolidated financial statements.

Concentrations of risks - Geographic

As a result of the various acquisitions in 2003 through 2006, the Company now has offices, employees and customers in a variety of foreign countries. Its four foreign-based subsidiaries are located in Singapore; Caracas, Venezuela; Shanghai, Peoples Republic of China and Sao Paulo, Brazil. For the three months ended September 30, 2009, RKM Suministros, C.A., based in Caracas, Venezuela, serving Latin America, represents approximately 8% of the Company’s total revenue and 6% of total assets; Infotel, based in Singapore, and serving Asia, represents approximately 2% of the Company’s total revenue and 3% of total assets; China Crescent Enterprises, Inc., based in Shanghai, China, serving Asia, represents approximately 42% of the Company’s total revenue and 21% of total assets and UniOne, based in Sao Paulo, Brazil, serving Latin America, represents approximately 16% of the Company’s total revenue and 4% of total assets.

Investment in unconsolidated affiliates/subsidiaries

The Company’s investment in affiliates at September 30, 2009, is composed of an 8% equity position in RedMoon Broadband, Inc., and a 5% equity position in Alternet Systems, Inc. These equity positions do not represent a controlling interest in these companies.

The Company accounts for its investment in affiliates, defined as those whereby the Company owns less than 51% of the issued and outstanding common stock of the affiliate and the Company does not exercise control over the operations of the affiliate, by the equity method of accounting. At September 30, 2009, the Company did not record any income or loss, nor adjust its investment account, by the net income or loss of the affiliates, as the actual equity percentage paid for was the investments was less than 10%, with a concurrent de minimus net income/loss related thereto.

2. DESCRIPTION OF BUSINESS:

NewMarket Technology, Inc, (f/k/a IPVoice Communications, Inc.), is a Nevada corporation which conducts business from its headquarters in Dallas, Texas. The Company was incorporated on February 19, 1997 as Nova Enterprises, Inc., changed its name to IPVoice Communications, Inc. in March of 1998, then to IPVoice.com, Inc. in May of 1999, back to IPVoice Communications, Inc. in January of 2001 and to NewMarket Technology, Inc., in July 2004. The Company is involved in the information technology industry, principally voice over internet (VoIP), systems integration, and wireless broadband technology. The Company currently has domestic operations in Texas and California, and international operations in The People’s Republic of China, Singapore, Venezuela, Colombia and Brazil.

3. STOCKHOLDERS’ EQUITY:

Common stock

The Company has authorized 300,000,000 shares of $0.001 par value common stock. The Company had 16,177,457 shares of common stock issued and outstanding at September 30, 2009.

During the third quarter of 2009, the Company issued 2,358,244 shares of common stock as follows:

· In September 2009, the Company issued 1,477,035 shares of common stock in exchange for a $591,700 reduction in short-term debt.

· In the third quarter of 2009, the Company issued 881,209 shares of common stock pursuant to the conversion of 185 shares of Series J Preferred Stock.

On July 31, 2009, the Company announced the effectiveness of a 20-for-1 reverse stock split. The financial statements have been adjusted to reflect this change in stockholder’s equity. Additionally, the Company’s new trading symbol for the common stock on the OTC market is NWMT.

Preferred stock

The Company has authorized 10,000,000 shares of $0.001 par value preferred stock. Rights and privileges of the preferred stock are determined by the Board of Directors prior to issuance. The Company had 925 shares of Series C preferred, 41 shares of Series E preferred stock, 2,166 shares of Series J preferred stock, and 500 shares of Series K preferred stock issued and outstanding, at September 30, 2009.

In April 2009, the Company entered into a Debt Restructure and Equity Reorganization Comprehensive Agreement ("Debt Restructure") with Green Shield Management Company ("Green Shield"), and ES Horizon, Inc. ("ES Horizon"). Pursuant to the terms of the Debt Restructure, the Company issued 750 shares of the newly authorized Series J Convertible Preferred Stock to Green Shield and 500 shares of the newly authorized Series K Preferred Stock to ES Horizon (see Note 6.)

Additionally, pursuant to the Debt Restructure, in the third quarter of 2009, Green Shield agreed to exchange 225 shares of Series F preferred stock, 835 shares of Series H preferred stock, and 541 shares of Series I preferred stock for an equal number of shares of Series J preferred stock.

4. STOCK OPTIONS AND WARRANTS:

Stock options

The Company maintains no stock option plan or long-term incentive plan at this time.

Warrants

In November 2007, the Company entered to a long-term financing arrangement (see Note 6). Pursuant to the terms of this financing, the Company issued five year warrants to purchase a total of 609,156 shares of common stock of the Company to two different parties. These options are exercisable at a price of $4.40 per share. These warrants were valued at the time of issuance at $536,540 using the Black-Scholes valuation model.

In January 2008, the Company issued Oberon Securities, the placement agent for the recent long-term financing agreement, five year warrants to purchase 140,000 shares of common stock. These options are exercisable at a price of $4.00 per share. These warrants were valued at $123,400 at the time of issuance using the Black-Scholes valuation model.

As of September 30, 2009 the value of all outstanding warrants based on the Black-Scholes valuation model was $0.

5. CAPITAL STOCK TRANSACTIONS:

Following is a schedule of changes in shareholder’s equity for the nine months ended September 30, 2009:


	Number of Shares					Par Value of Shares					Additional Paid-In			Deferred			Accumulated Comprehensive			Accumulated			Stockholders'
	Preferred			Common		Preferred			Common		Capital			Compensation			Income			Deficit			Equity

STARTING BALANCE, 12/31/08		2,922			11,998,431	$	3		$	11,998	$	53,440,872		$	(226,333	)	$	2,256,639		$	(24,352,041	)	$	31,131,138

Conversion of preferred stock		(540	)		1,601,991		(1	)		1,601		(1,600	)											-

Preferred stock issued to settle debt		1,250					1					1,249,999												1,250,000

Common stock issued to settle debt					1,977,035					1,977		839,723												841,700

Common stock issued for services					450,000					450		219,350			(197,500	)								22,300

Common stock issued for trade payables					150,000					150		89,850												90,000

Amortization of deferred comp.															312,583									312,583

Other comprehensive income (loss)																		(1,620,775	)					(1,620,775	)

Net income																					2,239,451			2,239,451

ENDING BALANCE, 9/30/09		3,632			16,177,457	$	4		$	16,176	$	55,838,194		$	(111,250	)	$	635,864		$	(22,112,590	)	$	34,266,397

6. INDEBTEDNESS:

On November 30, 2007, the Company and certain of its subsidiaries including, IP Global Voice, Inc, Netsco, Inc., Newmarket Broadband, Inc., Newmarket Intellectual Property, Inc and NewMarket China, Inc., entered into a Security Agreement (the “Security Agreement”) with LV Administrative Services, Inc. (the “Agent”) as administrative and collateral agent for Valens U.S. SPV I, LLC (“Valens US”) and Valens Offshore SPV II, LLC (“Valens Offshore,” and together with the Agent and Valens US, the “Creditor Parties”). Pursuant to the terms of the Security Agreement, the Company issued a secured convertible term note to Valens US and Valens Offshore in the principal amounts of $1,800,000 and $2,200,000 respectively (collectively, the “Notes”). In addition, the Company issued a Revolving Note to Valens US, pursuant to which Valens has committed to advance up to $3,000,000 to the Company (the “Revolving Note”).

The Notes and the Revolving Note bear interest at a rate equal to the “prime rate” published in The Wall Street Journal plus two percent (2%), per annum (the “Contract Rate”), provided however that the Contract Rate shall not at any time be less than nine percent (9%) per annum. The unpaid principal and accrued interest under the Notes and the Revolving Note are due and payable on November 30, 2010 (the "Maturity Date"). The interest on the Notes and the Revolving Note is payable monthly, in arrears, commencing on December 1, 2007.

The Notes require amortizing payments of the principal amount of $133,333 together with any accrued and unpaid amounts (the “Monthly Amount”) which are owed to the Creditor Parties, commencing on June 1, 2008 and on the first business day of each succeeding month thereafter through the maturity date. The Creditor Parties may convert a portion of the Monthly Amount into shares of ,the Company’s common stock provided: (A) the average closing price of the Company’s common stock exceeds 115% of the Fixed Conversion Price of $.20; (B) the amount of such conversion does not exceed 25% of the average dollar trading volume of the Company’s common stock for the 22 trading date immediately preceding the due date of the Monthly Payment. If the criteria set forth above in (A) is met but the criteria set forth in (B) is not met as to the entire Monthly Amount, the Creditor Parties shall convert only such part of the Monthly Amount that meets the criteria set forth in (B). Any portion of the Monthly Amount that has not been converted into shares shall be payable at the rate of 100% of the Monthly Amount in cash. In addition, the Company is not permitted to make any payments in shares of its common stock if there is no effective registration statement covering the resale of the shares or an event of default exists and is continuing.

Pursuant to the Security Agreement, an event of default shall be deemed to include: the Company's failure to pay any amount due under the Notes and the Revolving Note where such failure continues for a period of 3 days after such payment is due; the failure of the Company and its subsidiaries to pay any taxes when due; any person or group, other than a lender under the Security Agreement, becomes the beneficial owner of 35% or more of the Company's voting equity interests or if the Board of Directors of the Company ceases to consist of a majority of the Company's Board of Directors on the date of the Security Agreement or the Company or any of its subsidiaries mergers or consolidates with or sells all or substantially all of its assets; the indictment of the Company or any of its subsidiaries or any officer of the Company under any criminal statute or commencement of criminal or civil proceedings against any company; and the Company’s failure to deliver common stock as required by the warrants and the Notes and such failure is not cured within 2 business days.

The Company granted a security interest to Valens in each of the Company’s real or personal, tangible or intangible, property and assets. The Company also pledged the stock of its subsidiaries and other equity interests owned by the Company.

The Company also issued five year warrants to purchase 191,292 shares of common stock of the Company to Valens Offshore and warrants to purchase 417,864 shares of common stock of the Company to Valens US which are exercisable at a price of $4.40 per share.

In October 2008, the Revolving Note was cancelled at the request of the Company.

In April 2009, the Company entered into a Debt Restructure and Equity Reorganization Comprehensive Agreement ("Debt Restructure") with Green Shield Management Company ("Green Shield"), and ES Horizon, Inc. ("ES Horizon"). In March 2009, Green Shield purchased $1.25 million of senior debt with a due date of November 2010, from the Creditor Parties. As part of the Debt Restructure, Green Shield agreed to convert $750,000 of the senior debt into 750 shares of the Company's newly designated Series J Preferred Stock (see Note 3). The Debt Restructure also required the Company to authorize and issue a super -majority voting Series K Preferred Stock. Additionally, Green Shield has agreed to sell $500,000 of senior debt to ES Horizon. As part of the transaction, ES Horizon converted $500,000 of senior debt into 5,000 shares of Series K Preferred Stock (see Note 3). ES Horizon is a Nevada corporation, of which the Company's President and Chief Executive Officer, Philip Verges, is a 99% owner. Green Shield is not an affiliate, as defined in Rule 144 under the Securities Act of 1933, of either ES Horizon or of the Company.

7. EARNINGS PER SHARE:

Following is the disclosure required by SFAS 128, Earnings per Share.

For the Nine Months Ended September 30, 2009

	Income (Numerator)		Shares (Denominator)		Per- Share Amount
Basic EPS:
Income available to common stockholders	$	2,239,451		13,437,254	$	0.17
Effect of Dilutive Securities:
Convertible preferred stock		0		5,157,143
Convertible debt		0		0
Diluted EPS:
Income available to common stockholders + assumed conversions	$	2,239,451		18,594,397	$	0.12

For the Nine Months Ended September 30, 2008

	Income (Numerator)		Shares (Denominator)		Per- Share Amount
Basic EPS:
Income available to common stockholders	$	3,758,484		10,641,434	$	0.35
Effect of Dilutive Securities:
Convertible preferred stock		0		1,695,556
Convertible debt		0		0
Diluted EPS:
Income available to common stockholders + assumed conversions	$	3,758,484		12,336,990	$	0.30

8. DISCONTINUED OPERATIONS:

On October 20, 2003, Intercell acquired a controlling 60% equity interest in Brunetti, LLC (“Brunetti”) in exchange for a $700,000 cash contribution to Brunetti. On January 30, 2004, Intercell acquired the remaining 40% equity interest in Brunetti in exchange for a $300,000 cash contribution to Brunetti.

On October 11, 2004, Intercell discontinued the operations of Brunetti and implemented steps to liquidate the assets of Brunetti. On March 1, 2005, Brunetti filed a voluntary petition for relief in the United States Bankruptcy Court, District of Colorado under Chapter 7 of Title 7 of the U.S. Bankruptcy Code.

At September 30, 2009, the carrying values of Brunetti’s assets and liabilities (presented as assets and liabilities of discontinued operations) are as follows:

Cash	$	9,377
Total assets (all current)	$	9,377

Accounts payable	$	179,473
Related party payable		25,035
Line of credit		10,735
Accrued payroll		93,440
Total liabilities (all current)	$	308,683

Brunetti reported no revenues or income during the nine months ended September 30, 2009. Operations related to Brunetti resulted in a net loss during the year ended December 31, 2008 and 2007 of $0 and $0, respectively. Brunetti did not incur any income taxes during these periods.

9. INCOME TAXES

Deferred income taxes (benefits) are provided for certain income and expenses which are recognized in different periods for tax and financial reporting purposes. The Company has net operating loss carry-forwards for income tax purposes of approximately $18,800,000 which expire beginning December 31, 2117. There may be certain limitations on the Company’s ability to utilize the loss carry-forwards in the event of a change of control, should that occur. In addition, the Company amortizes goodwill for income tax purposes, but not for reporting purposes. The amount recorded as a deferred tax asset, cumulative as of September 30, 2009, is $19,807,000, which represents the amount of tax benefits of the loss carry-forwards and goodwill amortization. The Company has established a valuation allowance for this deferred tax asset of $19,807,000, as the Company has no long-term history of profitable operations, in substantive amount necessary to utilize this asset. The significant components of the net deferred tax asset as of September 30, 2009 are:

Net operating losses	$	18,800,000
Goodwill amortization		1,007,000
Valuation allowance		(19,807,000	)
Net deferred tax asset	$	0

10. COMMITMENTS AND CONTINGENCIES:

Leases

The Company’s corporate headquarters operates out of approximately 2,800 square feet of leased facilities located at 14860 Montfort Drive, Suite 210, Dallas, Texas 75254. The lease expires on December 31, 2009. The monthly rental payments are $3,100. The Company has a number of additional leases for office space associated with its subsidiary operating companies.

Litigation

From time to time, the Company is involved in various claims and legal actions arising in the ordinary course of business. Although the amount of any liability that could arise with respect to currently pending actions cannot be accurately predicted, in the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company's consolidated financial position, results of operations, or liquidity.

11. SUBSEQUENT EVENTS:

On October 14, 2009, the Company entered into a Debt Restructure Agreement ("Debt Restructure") with Green Shield Management Company ("Green Shield"), and Timeless Investments, Ltd. ("Timeless"). Timeless currently holds $1.5 million in debt (the "Note Participation") purchased on October 8, 2009 from Valens Offshore SPV II Corp. and Valens Offshore SPV I, Ltd. Timeless assigned $500,000 of the Note Participation to Green Shield on October 9, 2009. The $2.0 million of total debt had a maturity date of November 10, 2010.

Pursuant to the Debt Restructure, Timeless has agreed to convert $1.5 million of the Note Participation into 1,500 shares of the Company's Series J Preferred Stock. In addition, Green Shield has also agreed to convert $500,000 of Note Participation, into 500 shares of the Company's Series J Preferred Stock. Both Green Shield and Timeless have waived any rights to and forgiven any unpaid interest, fees or penalties that may be due under the Note Participation.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Safe Harbor for Forward-Looking Statements

The following discussion should be read in conjunction with our condensed consolidated financial statements and the related notes included elsewhere in this report.

Information contained herein contains forward-looking statements, You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Forward-looking statements include information concerning our possible and assumed future results of operations, including descriptions of our business strategy. The statements often include words such as “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or other similar expressions. These statements are based on assumptions that we have made in light of our experience and well as perceptions of historical trends, current conditions, expected future developments, and other factors we believe are appropriate under the circumstances. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financials results or results of operations and could cause actual results to differ materially from those on the forward-looking statements. These factors include, but are not limited to, competition from existing and future competitors, failure to maintain and develop business, failure to increase or maintain the number of customers we have, downturns in the economies and/or industries that we serve, and the failure to attract or keep qualified professionals we employ. These factors and others discussed in detail in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You should keep in mind that any forward-looking statements made by us herein, or elsewhere, speaks only as of the date on which we made it. New risks and uncertainties come up from time to time, and it is impossible for us to predict these events or how they may affect us. We have no obligation to update any forward-looking statements after the date hereof, except as required by federal securities laws.

Links to all of our filings, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, information statements and other material information concerning us are available on the Investor Relations page of our website at www.NewmarketTechnology.com .

Critical accounting policies

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, bad debts, inventories, warranty obligations, contingencies and income taxes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. A discussion of our critical accounting policies and the related judgments and estimates affecting the preparation of our consolidated financial statements is included in the Annual Report on our form 10-K for the fiscal year 2008. There have been no material changes to our critical accounting policies as of September 30, 2009.

Overview

We believe our strategy, introduced in June of 2002, to package proprietary technology products and services with recognized brand names and to pursue sales in the high demand IP communications, wireless broadband and systems integration markets will be successful. In 2005, we initiated an expansion of our business model through the launch of sister operations in Latin America and Asia. In the future we may expand into other regions.

While we have and continue to grow sales through mergers and acquisitions, management plans for our long-term growth to be achieved through a combination of acquisitions and organic sales growth.

We expect that additional capital will be required to support our growth plan. However, no specific capital plan exists. Current consideration entails raising capital directly to our operating subsidiaries and reducing or eliminating the use of our common stock for future capital plans.

Part of the Company’s growth strategy includes expansion into high-growth developing economic regions. These developing economic regions provide both an environment for accelerated growth as well as a parallel platform for acquiring early stage subsidiary technology companies and developing them into mainstream technology service and product companies.

Recent Developments

In January 2009, we announced our “Greenfield” strategy which is an emerging technology business partnership program under which we would identify and partner with companies that would:

·	benefit from the current organizational structure of NewMarket

·	open up potential new markets for emerging companies based on strategic relationships

·	create potential equity investments through merger strategies that allow for capital raises through equity or debt instruments

·	improve the return-on-investment opportunities for emerging technologies and emerging market businesses

As part of this new strategy, in March 2009 we announced a strategic partnership with NuMobile, Inc., f/k/a Phoenix Interests, Inc., under which we will exchange our investment in Stonewall Networks, Inc. (“Stonewall”), a security software developer for mobile networks, for a convertible equity interest in NuMobile.

Results of Operations

Three months ended September 30, 2009 compared to three months ended September 30, 2008

Net sales decreased 2% from $32,379,164 for the quarter ended September 30, 2008 to $31,707,269 for the quarter ended September 30, 2009. This decrease was primarily due to a small decrease in sales in our domestic systems integration subsidiaries.

Cost of sales decreased 2% from $26,217,589 for the quarter ended September 30, 2008 to $25,617,769 for the quarter ended September 30, 2009 due to the corresponding decrease in sales. Our gross margin, as a percentage of sales was 19% and 19% for the quarters ended September 30, 2009 and 2008, respectively. Our management plans to continue to pursue strategies to reduce the overall cost of sales as a percentage of sales as the company grows.

General and administrative expenses increased 20% to $4,459,612 for the quarter ended September 30, 2009 from $3,719,802 for the quarter ended September 30, 2008. The increase is primarily the result of an increase in headcount in our Latin American and Chinese operating subsidiaries.

Depreciation and amortization expense decreased 84% from $239,172 for the quarter ended September 30, 2008 to $38,228 for the quarter ended September 30, 2009. At the end of 2008, the Company wrote off the balance of certain software assets held by our Singapore-based systems integration subsidiary and consequently we are no longer amortizing that balance. Depreciation on fixed assets is calculated on the straight-line method over the estimated useful lives of the assets.

The Company had net income of $1,555,235 for the quarter ended September 30, 2009 after accounting for the non-controlling interest in a consolidated subsidiary, compared to net income of $1,753,918 for the quarter ended September 30, 2008, a decrease of 11%. The decrease was due to an increase in operating expenses. Comprehensive net income, which is adjusted to compensate for the risk associated with foreign profits and the potential conversion of foreign currency, as well as the change in market value of available-for-sale securities, increased from comprehensive net income of $1,763,056 for the quarter ended September 30, 2008 to $1,873,960 for the quarter ended September 30, 2009, an increase of 6%.

Nine months ended September 30, 2009 compared to nine months ended September 30, 2008

Net sales decreased 1% from $76,069,467 for the nine months ended September 30, 2008 to $75,581,615 for the nine months ended September 30, 2009. This decrease was primarily due to decreased sales in our domestic systems integration subsidiaries, offset by an increase in sales in our Chinese systems integration subsidiary.

Cost of sales increased 4% from $59,092,154 for the nine months ended September 30, 2008 to $61,167,080 for the nine months ended September 30, 2009 due to competitive pricing pressures in our foreign systems integration subsidiaries, which was offset by higher gross margins from outsourcing agreements entered into by our Chinese and Colombian subsidiaries. Our gross margin, as a percentage of sales was 19% and 22% for the nine months ended September 30, 2009 and 2008, respectively. Our management plans to continue to pursue strategies to reduce the overall cost of sales as a percentage of sales as the company grows.

General and administrative expenses decreased 4% to $10,891,740 for the nine months ended September 30, 2009 from $11,400,162 for the nine months ended September 30, 2008. The decrease is primarily the result of a decrease in headcount in our Latin American and Chinese operating subsidiaries earlier in the year.

Depreciation and amortization expense decreased 86% from $797,357 for the nine months ended September 30, 2008 to $115,567 for the nine months ended September 30, 2009. At the end of 2008, the Company wrote off the balance of certain software assets held by our Singapore-based systems integration subsidiary and consequently we are no longer amortizing that balance. Depreciation on fixed assets is calculated on the straight-line method over the estimated useful lives of the assets.

Net income decreased 40% from $3,758,484 for the nine months ended September 30, 2008 after accounting for the non-controlling interest in a consolidated subsidiary, to $2,239,451 for the nine months ended September 30, 2009. The decrease was due to a decrease in our gross margin offset by a decrease in operating expenses. Comprehensive net income, which is adjusted to compensate for the risk associated with foreign profits and the potential conversion of foreign currency, as well as the change in market value of available-for-sale securities, decreased 87% from $4,819,131 for the nine months ended September 30, 2008 to $618,676 for the nine months ended September 30, 2009.

Liquidity and Capital Resources

Our cash balance at September 30, 2009 decreased $1,246,227 from $4,960,869 as of December 31, 2008, to $3,714,642. The decrease was the result of a combination of cash used in investing activities of $566,245, cash used in financing activities of $915,881 and the effect of exchange rates on cash of $515,947 offset by cash provided by operating activities of $751,846. Operating activities for the nine months ended September 30, 2009 exclusive of changes in operating assets and liabilities provided $4,067,500, as well as a decrease in prepaid expenses of $1,238,134 and an increase in customer deposits and accrued expenses of $1,202,247 offset by an increase in accounts receivable and inventory of $4,961,562 and a decrease in accounts payable of $794,473.

As of September 30, 2009, we own 1.4 million shares of common stock of VirtualHealth. We have classified these shares as available for sale securities in which unrealized gains (losses) are recorded to shareholders’ equity. At September 30, 2009, all 1.4 million shares of VirtualHealth common stock are tradable and the market value of the VirtualHealth common shares at September 30, 2009 was $364,000.

Since inception, we have financed operations primarily through equity security sales. We may need to raise cash through additional equity sales at some point in the future in order to sustain operations. Accordingly, if revenues are insufficient to meet needs, we will attempt to secure additional financing through traditional bank financing or a debt or equity offering; however, because of the potential of a future poor financial condition, we may be unsuccessful in obtaining such financing or the amount of the financing may be minimal and therefore inadequate to implement our continuing plan of operations. There can be no assurance that we will be able to obtain financing on satisfactory terms or at all, or raise funds through a debt or equity offering. In addition, if we only have nominal funds by which to conduct our operations, it will negatively impact our potential revenues.

Off-Balance Sheet Arrangements

We do not currently have any off-balance sheet arrangements as defined in Item 303(c)(2) of Regulation S-K.

Recent Accounting Pronouncements

For a discussion of new accounting pronouncements, refer to Note 1 of Notes to Condensed Consolidated Financial Statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk from changes in foreign currency exchange rates, including fluctuations in the functional currency of foreign operations. The functional currency of operations outside the United States is the respective local currency. Foreign currency translation effects are included in accumulated comprehensive income in shareholder’s equity. We do not utilize derivative financial instruments to manage foreign currency fluctuation risk.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act (the “Exchange Act”), as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management to allow for timely decisions regarding required disclosure.

Based on their evaluation, as of September 30, 2009, our management, including our Chief Executive Officer and Chief Financial Officer, have concluded that our disclosure controls and procedures as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934 were effective.

Changes in Internal Control over Financial Reporting

No change in our internal controls over financial reporting (as defined in Rules 13a-15(f) under the Exchange Act) occurred during the quarter ended September 30, 2009 that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are involved from time to time in various legal actions. Ware not currently aware, however, of any actions that management believes would materially adversely affect the business, financial conditions or results of operations. We may be subject to future claims which would cause it to incur significant expenses or damages, including from subsidiaries that have previously been acquired. If we acquire or consolidate additional subsidiaries in the future, we may assume obligations and liabilities of such entities.

We not aware of any contemplated legal proceeding by a governmental authority in which we may be involved.

ITEM 1A. RISK FACTORS

No material changes in the risks related to our business have occurred since the filing of our Annual Report on Form 10-K for the year ended December 31, 2008. You should carefully consider the risk factors set forth in the Annual Report on Form 10-K and the other information set forth elsewhere in this Quarterly Report on Form 10-Q. You should be aware that these risk factors may not describe every risk facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or results of operations.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES

Set forth below is information regarding the issuance and sale of our securities without registration during the three month period ended September 30, 2009:

· In September 2009, the Company issued 1,477,035 shares of common stock in exchange for a $591,700 reduction in short-term debt.

· In the third quarter of 2009, the Company issued 881,209 shares of common stock pursuant to the conversion of 185 shares of Series J Preferred Stock.

Each of the above issuances was deemed to be exempt under Rule 506 of Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended. No advertising or general solicitation was employed in offering the securities. The offerings and sales were made to a limited number of persons, all of whom were accredited investors, business associates of our company or executive officers of our company, and transfer was restricted by our company in accordance with the requirements of the Securities Act of 1933. In addition to representations by the above-referenced persons, we have made independent determinations that all of the above-referenced persons were accredited or sophisticated investors, and that they were capable of analyzing the merits and risks of their investment, and that they understood the speculative nature of their investment. Furthermore, all of the above-referenced persons were provided with access to our Securities and Exchange Commission filings.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

Exhibits

EXHIBIT
NO.	DESCRIPTION OF EXHIBIT

10.1	Annual Report for the year ended December 31, 2008, as filed in Company’s Form 10-K June 19, 2009, and incorporated herein by reference

31.1 *	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 *	Certification of Chief Executive Officer and Principal Financial Officer Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 *	Certification of Philip M. Verges, Chairman and Chief Executive Officer of the Company, pursuant to 18 United States Code Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 *	Certification of Philip J. Rauch, Chief Financial Officer of the Company, pursuant to 18 United States Code Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Filed Herewith

Reports on Form 8-K

During the three-month period ended September 30, 2009, the Company filed the following Current Report on Form 8-K:

Current Report on Form 8-K filed on August 21, 2009 which included disclosure under Item 4.01 related to the acceptance by the Audit Committee of the Board of Directors of the Company of the resignation of the Pollard-Kelley Auditing Services, Inc., the Company’s independent auditors and the appointment effective August 3, 2009, of Hamilton, PC as the Company’s new independent registered auditor.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant certifies that it has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	NewMarket Technology, Inc.

Date: November 23, 2009	By:	/s/ Philip M. Verges
		Philip M. Verges
		Chairman and Chief Executive Officer (Principal Executive Officer)



Date: November 23, 2009	By:	/s/ Philip J. Rauch
		Philip J. Rauch
		Chief Financial Officer (Principal Financial Officer)

NewMarket Technology Inc - FORM 10-Q - November 23, 2009

Attached files

NewMarket Technology Inc Reports