DENVER, CO--(Marketwire - October 15, 2009) - Worldwide Strategies, Inc. (
OTCBB:
WWSG) today
released a letter to shareholders from CEO James Samuels. The letter is
addressed to the shareholders of NewMarket Technology, Inc. (
PINKSHEETS:
NWMT) and NewMarket Latin America, Inc. as well as the shareholders of
Worldwide. Mr. Samuels discusses the plan for the three companies to
achieve a national exchange listing and improved share price with a
potential to achieve a 400% to 500% increase in the resulting market
capitalization.
NewMarket Technology, Inc. currently has approximately $100 million in
annual revenue with a historical and ongoing positive operating income.
NewMarket management has previously communicated an opinion that the
NewMarket share price is undervalued. The agreement with Worldwide is the
first step of a comprehensive strategy to deliver a long-term return to
both the shareholders of NewMarket and Worldwide.
Mr. Samuels' letter discussing the strategy is included in its entirety
below.
Dear Worldwide, NewMarket, and NewMarket Latin America Shareholders -
The over-the-counter market is a good source of funding for early stage
business plans. It is also a good market for investors to make compelling
returns on small investments over a relatively short period of time. The
over-the-counter market can prove very lucrative to an investor that can
commit the time to invest in a portfolio of early stage businesses and
monitor the progress of those businesses on virtually a daily basis.
Long-term return on investment opportunities in over-the-counter listed
companies are ultimately only achievable when the company exits the
over-the-counter market. My letter today is intended to discuss a plan for
a combined exit from the over-the-counter market that is beneficial to the
shareholders of Worldwide, NewMarket and NewMarket Latin America.
NewMarket and NewMarket Latin America have been led by one of the best and
most genuine entrepreneurial management teams I have ever had the
experience of meeting or working with in the course of my career. Without
exactly sharing the number of years I have taken to become a seasoned
senior manager in transitioning early stage companies to a more mature, and
national exchange-listed, next stage of development, I will share that I am
a proud grandfather. I have seen a good deal of entrepreneurial management
teams, and this one at NewMarket is the best.
First of all, they never give up. They were hoodwinked into taking a
family founded technology business public through a reverse merger in 2002.
Once they figured out what they had gotten themselves into, they not only
overcame, they thrived. I cannot point to any comparison by which to give
reference to the sheer magnitude of what the NewMarket management team has
been able to build given the scarcity of resources available for the task.
NewMarket is a multinational corporation with approximately $100 million in
revenue and producing a consistent positive operational income. Many
over-the-counter listed entrepreneurial companies have been decimated in
the aftermath of hedge fund financing combined with a historic financial
market crisis. Not NewMarket. Just last week, after over a yearlong
battle, NewMarket exited a caustic hedge fund financing contract with an
improved balance sheet and capital structure.
I have been in discussions and negotiations with NewMarket for over a year
to construct a transaction intended to deliver a long-term return on
investment to both the shareholders of NewMarket and Worldwide Strategies.
The CEO of NewMarket, Philip Verges approached me to explore a combined
strategy whereby he could deliver a long-term return on investment to the
NewMarket shareholders. I was impressed by his earnest commitment for his
objective. I have since become highly confident in his ability to deliver.
The before mentioned hedge fund financing included collateral security
agreements that have precluded NewMarket from entering into a strategic
agreement with Worldwide. With the hedge fund contract terminated, the
strategic plan between Worldwide and NewMarket is ready to proceed. I will
be with Philip and the rest of the NewMarket management team in Dallas next
week with an array of accountants and lawyers to finalize terms on the
first step of the overall strategy.
NewMarket and Worldwide have entered into a letter of intent agreement to
combine NewMarket's subsidiary operation in Brazil with approximately $20
million in revenue into Worldwide. This intended transaction will provide
the Worldwide shareholders with a substantially increased business
operation. At the same time, the transaction will provide the shareholders
of NewMarket Latin America, the subsidiary of NewMarket holding the
Brazilian operation, with a publicly traded stock. NewMarket is the
majority shareholder of NewMarket Latin American and following the
combination of NewMarket Latin America with Worldwide, NewMarket will be
the majority shareholder of Worldwide.
Again, the transaction to combine Worldwide and NewMarket's Brazilian
operation is only the first step of the overall strategy. The objective of
the overall strategy is to ultimately deliver a long-term return on
investment to both the NewMarket and Worldwide shareholders. For the
NewMarket shareholders, that long-term return on investment is overdue as a
result of the over-the-counter market dynamics.
The market capitalization of NewMarket is approximately 10% to 20% of the
company's annual revenue. In other words the price-to-sales ratio is
approximately .1 to .2 times revenue. Comparable national exchange-listed
companies enjoy an approximate sales ratio of .7 to 1 times revenue. A
move of NewMarket assets to a national exchange listing can potentially
deliver a dramatic increase in value to shareholders. Of course Worldwide
shareholders would also benefit.
In the current market with the investment capital that is generally
available to over-the-counter companies, it is difficult to raise money to
invest in a business plan and at the same time experience long-term share
price appreciation. Hedge funds are called hedge funds because they hedge
against investment risk by leveraging stock as security. The hedge in turn
frequently precludes share price appreciation. In some instances, the
practice of hedging has become more profitable than the return on
investment potential.
Though a company may have fundamental financial success, that success may
not be conveyed in the company's share price if the path to the company's
success included hedge fund financing. NewMarket has established
reasonably sustainable fundamental financial success and, with the hedge
fund relationship terminated and the capital structure enhanced, the
company's share price will likely appreciate. A third party research
report has recently suggested a potential $1.42 price per share for
NewMarket's common stock. Based on national exchange-listed comparables,
it is my opinion NewMarket's stock could be as high as $3.50 to $5.00 per
share. The problem is the age-old problem of the 'Chicken and the Egg.'
Even $1.42 does not meet national exchange initial listing standards, so
how can the company realize its full potential if it cannot get on a
national exchange listing?
Worldwide has not raised money from the hedge fund market available to
over-the-counter companies. Worldwide's current operations do not require
substantial outside financing. Worldwide's issued and outstanding is
manageably sized and the float is small. The NewMarket operation being
combined with Worldwide is sustainable and not in need of financing.
Without a need for hedge fund financing, Worldwide can experience share
price appreciation. The intended transaction between NewMarket and
Worldwide is a first step toward achieving an initial public listing on a
National Exchange to facilitate subsequent steps to execute similar
transactions with other NewMarket operations and deliver a long-term return
on investment to both NewMarket and Worldwide shareholders.
This is a lot of information, and mergers and acquisitions are not the
easiest transactions to understand. Both Philip Verges and I will be
providing further communications on the strategy I have outlined here. I
want to emphasize a few important points before I conclude this letter.
NewMarket will be the majority shareholder of Worldwide. Even though the
Brazilian operations will be combined with Worldwide, the Brazilian
operational performance will continue to be consolidated into NewMarket's
financial statement. This would also be the case with any subsequent
similar transactions. Ultimately, NewMarket shareholders will receive
stock in Worldwide in order to potentially profit from the increased
valuation opportunity that can be achieved by moving from an
over-the-counter listing to a national exchange listing.
I have had the opportunity to help other companies move from
over-the-counter listings to a national exchange listing. I consider it a
privilege to be part of this opportunity with NewMarket and Worldwide.
NewMarket is the finest entrepreneurial organization I have ever
encountered and I know the management team is ready for this exciting
landmark transition in their ongoing development. I look forward to
elaborating more on the NewMarket and Worldwide plans in the near future
and encourage you to keep a look out for upcoming news and events.
Thank you,
James Samuels
CEO
Worldwide Strategies, Inc.
About NewMarket Technology, Inc. (
www.newmarkettechnology.com)
NewMarket is a reporting company with audited financial reports filed with
the SEC. NewMarket provides systems integration, technology infrastructure
services and emerging technology worldwide. NewMarket has a focus on
providing technology and support services to rapidly growing economies
where technology purchasing is on the rise. In addition to its base of
operations in North America, NewMarket has operations today in the growing
economies of China, Southeast Asia, Brazil and Northern Latin America. Last
year the Company reported over $40 million in revenue from Asia and over
$20 million in revenue from Latin America. Overall, NewMarket reported over
$95 million in revenue for 2008.
Across the globe, NewMarket is a Microsoft and Oracle partner, distributes
various computer hardware and peripherals from brand partners such as Dell,
HP, IBM, Cisco, Sony, Epson, Canon and Sanyo and is also an authorized
reseller of operating systems and various software from companies such as
Red Hat, Sybase, IBM, BEA, Veritas and others. Additionally, the Company
works with emerging technologies such as mobile computing, various security
and wireless broadband technologies.
NewMarket's rapid growth since 2002 has placed the Company on the Deloitte
Technology Fast 500 for 5 consecutive years. NewMarket was recognized as
the third fastest growing technology company in the United States in 2006
and the number one fastest growing technology company in North Texas for
two years in a row.
About Worldwide Strategies, Inc.
Worldwide Strategies, Inc. is a development tool stage business that has
built a proprietary affinity marketing process and system to provide
clients with outsourced services including multi-language capabilities. The
affinity market business has signed several substantial contracts but has
not established significant revenue.
"SAFE HARBOR STATEMENT" UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995
This press release contains forward-looking statements that involve risks
and uncertainties. The statements in this release are forward-looking
statements that are made pursuant to safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Actual results, events and
performance could vary materially from those contemplated by these
forward-looking statements. These statements involve known and unknown
risks and uncertainties, which may cause the Company's actual results in
future periods to differ materially from results expressed or implied by
forward-looking statements. These risks and uncertainties include, among
other things, product demand and market competition. You should
independently investigate and fully understand all risks before making
investment decisions.
Contact Information: Contact:
Worldwide Strategies, Inc.
303-991-5887
NewMarket Technology, Inc.
Investor Relations
214-733-3065
ir@newmarkettechnology.com