Newsletter

January 5, 2005

Volume VI, Issue 2

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To OTC Journal Members:

Global ePoint (NASDAQ: GEPT); Market Provides Window of Opportunity

Global ePoint was the OTC Journal's best short term idea in 2004. The stock allowed you four trading days to accumulate, and then it rocketed up the charts. It was first suggested in the November 29th edition. I recommended accumulating up to around $2.75.

The stock only traded in the $2.75 to $3 range for four trading days, then gapped to $4, and found its way to the $6.50 level over the next two trading sessions. I then suggested traders consider taking a profit in the December 4th edition.

GEPT is in the video surveillance technology space. The stock got going when the company announced it would be marketing homeland security related products with applications in its core competency.

Since first publishing on GEPT, the company has announced the following fundamental developments:

A 60 plane order from Air Berlin for cockpit video surveillance technology
A 24 plane order from Swiss International Airlines for video surveillance technology
A $2 million order for Airport X-Ray scanning machines.

This cascade of orders all came during the month of December, and that trend is due to pick up again now that the holidays have past.

I believe now is the time to revisit and reload on this idea. The early January sell off has provided a reasonably low risk entry point, and the stock is probably getting ready to reverse course in light of the news which came out today after the close.

In the first quarter of '05 I am looking for GEPT to start making some headway with sales of video surveillance technology for applications that can also be used by law enforcement agencies. Police vehicles can upload video surveillance information to central computers over cellular. The images can be used for vehicle and visual identification remotely. Digital video is also preserved to create a video record of police activity in the event the record needs to be reviewed in the future.

Expansion for 2005 will also take the company into the corporate digital video surveillance arena. Currently, over 98% off all video surveillance in US retail stores works on archaic VHS technology. Large chains are beginning to upgrade to digital systems wherein recordings can be preserved and time frames can be located with considerable more ease and lower costs. Look for the company to deliver new business in 2005 in retrofitting existing VHS systems with a digital upgrade. This market could expand far beyond the retail environment into the banking sector, restaurants, and workmen's comp fraud protection.

GEPT is currently trading in the $4.30 to $4.50 range. After the market closed today, GEPT announced it had completed a $2.5 million private placement. The money is being used to complete the next generation of their video surveillance technology.

The company has issued 500,000 shares, which brings the total issued and outstanding to 11.3 million. The company's market capitalization is still under $50 million, which still gives us a lot of upside against $20 million in annual revenues and growing.

More importantly is the consideration of the pricing of the private placement. This fund invested $2.5 million in return for 500,000 shares of newly issued restricted stock. It cannot be sold into the public market. Do the math- their cost basis on the $2.5 million investment is $5 per share.

Generally, fund managers do a lot of due diligence prior to making investments in the multi million dollar range. Fund managers make lots of mistakes just like anybody else. However, if a fund is investing in this company at $5 per share, they have a reasonable expectation they are going to make money on the investment.

This week's sell off in the market has provided an outstanding entry level. The fund bought 500,000 restricted shares at $5. You can buy free trading shares in the open market at less than $5, and sell them whenever you want.

For those who participated and traded out, or those who missed the first chance at GEPT, now is the time to take advantage of the market weakness and get back on board. I suggest accumulating this stock up to the $4.75 to $5 level. Look for today's announcement and future annoucements to keep the stock moving.

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

Global ePoint Completes $2.5 Million Financing

Funds to Accelerate Development of Company's Homeland Security Products and Technologies

CITY OF INDUSTRY, Calif.--(BUSINESS WIRE)--Jan. 5, 2005--Global ePoint, Inc. (Nasdaq: GEPT), an innovator in homeland security solutions in aviation, law enforcement and high-volume contract manufacturing, has closed a $2.5 million private placement sale of common shares, investment rights and warrants to institutional investors. The Company intends to use the net proceeds from the transaction for general corporate purposes, including investments in technology development and marketing initiatives and working capital requirements needed for its digital surveillance divisions. Toresa Lou, Chief Executive Officer of Global ePoint, made the announcement.

"As the homeland security marketplace expands and adopts new technologies and next-generation products, Global ePoint is taking steps to remain at the forefront of technology and product innovation," said Ms. Lou. "We will use these new financial resources to ensure that the pace of development within Global ePoint continues to provide the sort of next-generation homeland security solutions that our Company is known for. The world's security requirements continue to grow more complex, and our first-responders and citizens must be supported through technology and services provided by private industry."

Global ePoint's next-generation homeland security technologies include several proprietary technology solutions employing video surveillance, wireless communication and other services and products for the aviation security, law enforcement, and commercial security and surveillance markets.

H.C. Wainwright and Company Inc. acted as placement agent for the $2.5 million transaction, which was announced late in December 2004. Pursuant to the definitive Securities Purchase Agreement, the Company sold 500,000 shares of its common stock at a price of $5.00 per share. The Company also granted to the investors warrants to purchase 125,000 common shares over a three year period at an exercise price of $6.91 per share as well as the right to purchase an additional 400,000 common shares at $5.00 per share during the 90 trading day period following the effectiveness of a selling shareholder registration statement to be filed by the Company with the SEC for purposes of registering the resale of the investors' common shares, including the common shares issuable upon exercise of the investment rights and warrants.

Neither the exercise price of the investment right or warrants are subject to adjustment, except for standard anti-dilution relating to stock splits, combinations and the like.

The shares were sold in a private transaction under Regulation D of the Securities Act of 1933. Global ePoint is obligated to register the shares for resale on a registration statement within 30 days of close.

About Global ePoint, Inc.:

Global ePoint's growth catalyst, through its wholly-owned subsidiaries, is the design, manufacturing, sales and distribution of digital video surveillance systems for the law enforcement, military, aviation and homeland security markets. On the cutting edge of digital technology and seeking to expand its product line, Global ePoint is developing new compression technologies and next-generation, secure network digital video systems and servers for a wide range of new markets, concentrating primarily on security and homeland defense applications. As a solid recurring revenue stream, the Company also manufactures customized computing systems for industrial, business and consumer markets, as well as other specialized electronic products and systems. Complete vertical integration -- from design and manufacturing to sales and distribution -- allows the Company to capture efficiencies and maintain cost advantages in these growing markets, particularly homeland security. For more information, please visit http://www.globalepoint.com.

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the company's current expectations, estimates and projections, management's beliefs and numerous assumptions, all of which are subject to change. These forward-looking statements are not guarantees of future results and are subject to numerous risks and uncertainties. Our actual results could differ materially and adversely from those expressed in any forward-looking statement. For example, deliveries may be delayed or installations canceled. Regulations may change and negatively affect demand for our products. There can be no assurance that the company's subsidiaries and/or divisions will be able to achieve growth of sales or market share. The forward-looking statements in this release speak only as of the date of this release. We undertake no obligation to revise or update publicly any forward-looking statement for any reason. These and other risk factors are detailed in our periodic filings with the Securities and Exchange Commission.

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Contact:
     Global ePoint, Inc.
     John Price, 909-869-1688
     jprice@globalepoint.com

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Source: Global ePoint, Inc.

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