American Messaging and Nighthawk Systems Strengthen Joint Marketing Agreement

Newsletter

September 16, 2006

Volume VII, Issue 69

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To OTC Journal Members:

Nighthawk Systems (OTC BB: NIHK); Closing In on Turn Around Time

Here's a good old fashioned real penny stock idea for those who will still roll the dice on a $.03 stock. After years of flat line trading, NIHK came off the canvas last January when the company disclosed it had inked a distribution deal with Verizon Wireless. Inside of two months a $.035 stock peaked at $.16. On a percentage basis, it's like finding a $3.50 stock that ran to $16.

Over the last six months the stock has quietly moved back into oblivion. Why? - the answer is simple- the business simply did not materialize from the Verizon Wireless relationship. The Verizon people did not sell the Nighthawk system. The deal ended up meaning nothing to the company's fortunes.

NIHK makes a product that can remotely turn any electronic device on and off. Their major target market is utilities, but other markets look promising as well. The technology works off pager networks- hence Verizon's interest in creating more use of its pager network.

In the last week I have come to understand why the Verizon Wireless relationship never yielded results. As it turns out, Verizon Wireless sold its pager division to a company named American Messaging, which also bought SBC's pager division. American Messaging is now the second largest company in the pager world.

NIHK has had a few big volume days of late, and appears to be coming out of a Rip Van Winkle like sleep. Returning to life. Here's the reason as it was disclosed post close on Friday: NIHK has inked a distribution arrangement with Verizon's successor- American Messaging. Furthermore, NIHK and American Messaging have provided enhanced incentive to the sales force.

We've had a few easy money bounces in stocks over the past month. ACTC, USEI (albeit short lived), CPNE, NWKI, SUUB seems to be reviving, etc. With the exception of CPNE, they have all headed back down. This is part of a backing and filling process that should lead to breakouts that hold.

As you can see, NIHK is still very near the bottom of a multi month sell down. A couple of days ago there was a fairly big, very unexplained volume surge in the stock. There have been a couple of small contracts announced of late, but nothing earth shattering.

It seems like the stock is poised for an easy money bounce at the sub $.04 level. In light of Friday's revelation concerning American Messaging, investors could have renewed hope for a resurgence in this little penny stock.

Seems to me this is worth a punt for some high risk money- after all, who can resist a little oversold 4 cent'er as it gets back into rally mode. A great follow up to Friday's news would be some contract signings as a result of the American Messaging relationship. That would probably put some legs under this idea.

If you can pick it up at or under $.04, risk a penny. A promising speculation. I will have to move this out of the past profile archive section and back to the main page.

Here is the complete text of the press release for your review:

Press Release Source: Nighthawk Systems, Inc.

American Messaging and Nighthawk Systems Strengthen Joint Marketing Agreement

Friday September 15, 4:01 pm ET

SAN ANTONIO--(BUSINESS WIRE)--Sept. 15, 2006--Nighthawk Systems, Inc. (OTCBB:NIHK - News) and American Messaging (http://www.americanmessaging.net/paging/news.asp) today announced that they have agreed to join forces to provide telemetry solutions to enterprise customers utilizing American Messaging's wireless network. American Messaging is now the second largest paging company in the United States with approximately 1.5 million customers, providing network coverage in 98 of the top 100 markets and in all 50 states. Nighthawk Systems is a leading provider of intelligent wireless power control and emergency notification products.

Together Nighthawk and American Messaging are better able to take advantage of each company's core competencies to provide the best wireless remote control solutions for customers. This agreement provides a mutually beneficial framework under which both Nighthawk and American Messaging can bundle each other's services and products into their own product offerings.

H. Douglas Saathoff, Nighthawk's CEO, commented, "I'm extremely pleased that we've reached this agreement with American Messaging. They have formed a company with a sole and absolute focus on paging, allowing our respective customers to benefit from utilizing their extensive network. Nighthawk has gained access to a larger, more focused network of sales and marketing personnel that is committed to providing time and money-saving solutions to both new and existing customers."

"American Messaging remains focused on providing our customers with the most reliable one-way nationwide paging coverage in the United States," said J. Roy Pottle, Chairman and Chief Executive Officer of American Messaging. "We believe this agreement is a perfect fit, as we provide a dependable wireless network for Nighthawk devices that enables customers to control equipment in remote locations."

About Nighthawk Systems, Inc.

Nighthawk is a leading provider of intelligent wireless power control products that enable simultaneous activation or de-activation of multiple assets or systems on demand. Nighthawk's installed customer base includes major electric utilities, Internet service providers and fire departments in over 40 states. Nighthawk's products also enable custom message display, making them ideal for use in traffic control and emergency notification situations.

Individuals interested in Nighthawk Systems can sign up to receive email alerts by visiting the Company's website at www.nighthawksystems.com.

About American Messaging

American Messaging Services is a leader in business-to-business paging solutions, providing high quality customer support infrastructure and network reliability with cost efficiency in order to ensure superior customer satisfaction. American Messaging is the second largest paging company in the United States with 1.5 million customers, providing nationwide frequencies in addition to numerous local frequencies with coverage in 98 of the top 100 major metropolitan areas and in all 50 states. American Messaging offers a variety of services to meet the paging needs of business, emergency response, healthcare, and government organizations of all sizes. Services range from traditional numeric paging to two-way paging allowing the user to send and receive e-mail messages. Additional information about American Messaging and its services is available at www.americanmessaging.net.

Forward-Looking Statements

Statements contained in this release, which are not historical facts, including statements about plans and expectations regarding business areas and opportunities, acceptance of new or existing businesses, capital resources and future business or financial results are "forward-looking" statements. You should not place undue reliance on these forward-looking statements. Such forward-looking statements are subject to risks and uncertainties, including, but not limited to, customer acceptance of our products, our ability to raise capital to fund our operations, our ability to develop and protect proprietary technology, government regulation, competition in our industry, general economic conditions and other risk factors which could cause actual results to differ materially from those projected or implied in the forward-looking statements. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and our future results, levels of activity, performance or achievements may not meet these expectations. We do not intend to update any of the forward-looking statements after the date of this press release to conform these statements to actual results or to changes in our expectations, except as required by law.

Contact:

Nighthawk Systems, Inc., San Antonio
Doug Saathoff, 877-7-NIGHTHAWK, ext. 701
dsaathoff@nighthawksystems.com
or
American Messaging
J. Roy Pottle, 972-353-1879
roy.pottle@americanmessaging.net

Source: Nighthawk Systems, Inc.

Comments in the BLOG

There have been a couple of new BLOG postings this past week which should be of interest to many of you. First, I wrote some extensive commentary on the disappointing performance of US Energy (OTC BB: USEI) in Monday's action after the company announced a breathtaking $54 million contract. The stock surged up about 30% in the first hour on the highest volume in the stock's history, then cratered. It closed just below the opening price, which is nearly unthinkable. Comments in the BLOG. Also, there was a very interesting development out of wild trader Advanced Cell (OTC BB: ACTC). My comments are in the second BLOG posting of the week.

To use the BLOG, simply go to the home page at www.otcjournal.com - the BLOG will scroll down automatically on the right side of your screen. The most current journal entries appear in the middle of your screen. Check back frequently for updates particularly when stocks are moving to overbought or oversold levels in volatile markets.

Market Rocking- Micros Not At the Party; Yet

Over the years I have noticed certain patterns tend to repeat themselves. For example, stocks trade very well in October through January. They also generally trade poorly June through September. The rest of the year could go either way. May is a good time to get out of positions for the long, boring summer months. August and September are good times to buy in anticipation of the Santa Rally.

This year we had a particularly vicious June and July. However, the larger market has come roaring back in August on the strength of a potentially more accommodating FED and skyrocketing oil prices finally collapsing to more livable levels.

There is another phenomenon I like to call the "Microcap Switch". There are times when microcaps trade wonderfully, and times when you just scratch your head at how poorly they are performing when the rest of the market seems to be doing well.

We are in one of those time periods where the microcap switch is turned off. These periods are characterized by lackluster volume between events, and short lived surge when we have big volume days. Right now, volume surges are being viewed as selling opportunities. This is typical for this time of year, as sellers have had little liquidity for months.

I believe we are due for a blip in the market. This would probably be a good time to own some puts on the QQQQs. Once we have a correction, I believe it is full steam ahead for some time. Moreover, leadership will change. If you are in commodity stocks, forget it. You have had a strong three year run, and its over. Watch for semis, health care, biotech, and transformational technologies (more on that in a future edition) to lead the next bull market.

Once these excess supplies are chewed through, the microcap switch will flip back on, and it will be clear sailing for a while. Now is the time to load up on your favorites. Don't be too concerned about lackluster performance in the short term. The Microcap Switch is close to flipping back on.

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