To OTC Journal Members:
 

Dear Mr. Pitt

We had an unprecedented response to last weekend's edition, our letter to Harvey Pitt, Chairman of the SEC. In the letter we stated our belief that the idea of shortening the amount of time companies had to file their financial statements was the wrong way to go. We suggested the amount of time should be lengthened in order to achieve more accurate reporting. We got more responses to this edition than any we have ever published.

For those who replied by pointing out a couple of typos, thank you. We got it.

For those who corrected our view of the term "accrued", thank you for bringing this to our attention. We realize this is a commonly used legitimate accounting term, and perhaps we oversimplified the way it has been misused by companies and accounting firms.

For those of you who disagreed with our premise, and believe the reporting time should be shortened, we believe you are wrong. Thanks to computerized accounting systems companies do know exactly where they stand within a day or two of the end of the reporting period. However, their internal books must be balanced against statements from the financial institutions they deal with, and they should be reviewed by their auditor prior to the formal filing.

It is equally important for companies to provide investors with information as rapidly as possible after the end of the reporting period. Balancing these two issues is simple.

Companies should make a released estimate as soon as possible from the end of the reporting period based on their internal records. Their final filings, which by then will be old news, should be generated after reconciling statements and review by the auditor. In the event of there are a few minor changes, the companies would be protected from the rabid class action lawyers by the Safe Harbor Act.

Again, we believe shortening this process will lead to less accurate reporting and higher legal and accounting costs which have no potential to enhance the company's business. This will only serve to reduce earnings and hurt stock prices over the long term. The accounting firms will be able to command huge fees to meet jacked up requirements, and we will all suffer. Mr. Pitt ends up enhancing the profits of the industry from which he came. That's our opinion and we're sticking to it.
 

XML Global (OTC BB: XMLG)- Momentum Continues With US Government Contract Announcement

XML Global, which seems to have finally found its way above the $.20 mark, has come off the canvas in a major way. In June there was a strong possibility this company would go down the tubes along with so many other technology companies.

It seems as if the only stocks which have the ability to find their way north in these hideous market conditions are penny stocks, as evidenced in the recent price appreciation of both XML Global (OTC BB: XMLG) and Calypte Biomed (OTC BB: CALY) which seem willing to buck to downward spiraling trend.

Since June XML Global has announced the largest contract in its history, and the signing of a letter of intent for a $2 million financing on favorable terms for shareholders, and an acquisition.

The company has clearly reversed course, as has the stock. One glance at the chart reveals a stock in a clear uptrend, and it seems as if this microcap is gaining momentum.

Today, just after the market closed, XML Global announced the US Government's National Institute of Standards and Technology was purchasing its recently released GoXML Registry V3.0 product.

XML Global is a software company specializing in creating products using the revolutionary new programming language referred to as XML (extensible markup language). This "language" has the ability to act as a universal translator which allows huge computer systems to talk to each other efficiently. You can visit their web site at www.xmlglobal.com for more details.

Microsoft has been airing a television commercial where racks of wine crash to the ground. As the wine bottles are breaking, the wine merchant is updating his pricing to a customer live, in real time, via a hand held device. Microsoft describes this as "One Degree of Separation" at the end of the commercial. XML is the programming language which allows this fantasy to become reality.

This revolutionary new language is considered ideal for storing documents, and who has more documents to store than the US Government? Although not revealed in the press release, today's contract announcement probably does not yield substantial revenues for the company in the short term. However, as the US Government moves to modernize its computer systems, this announcement means there is a good possibility XML Global's products will be a part of the process.

We're still looking for this stock to head into the mid $.30 range, regaining the levels it was just this past May.

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

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MarketByte LLC has been paid the following fee by XML Global for a year of representation extending from February 2, 2001 to February 2, 2002: $100,000 cash, 60,000 shares of free trading stock, 60,000 shares of restricted stock which are now free trading, and 60,000 options exercisable at $2. The 60,000 shares of free trading stock have been contributed by a third party on behalf of the company. MarketByte's contract to represent the company expired February 2, 2002. The contract was renewed for another year, and XML Global has paid compensation of $20,000 in cash and one million shares of newly issued restricted common stock.

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