Nexicon Letter to Shareholders Q3 2009

Thu. October 22, 2009; Posted: 10:01 AM

To our friends and shareholders:

I am pleased to report on the many exciting developments at the company since my last correspondence in June. Though events in the past have presented us with immediate challenges that we will need to quickly overcome, overall it is an exciting time with great potential ahead.

On September 22, the board of directors unanimously appointed me as chief executive officer. I will continue to oversee the company's business development, operations, marketing and day-to-day management. I will also assume responsibility for pursuing strategic partnerships, corporate restructuring issues (designed to distance ourselves from the problematic "legacy" issues that are holding us back), and the expansion and refinement of the company's revenue growth plans. My prior experience at Accenture (formerly Andersen Consulting), where I planned and managed large business change initiatives for multiple Fortune 100 clients including Anheuser-Busch, Caterpillar, Kraft, Ocean Spray, United Technologies, and BMW, will prove to be invaluable experience for Nexicon's (Pink Sheets: NXCO | Quote | Chart | News | PowerRating) growth and development.

On the team front, I am pleased to welcome two new additions to Nexicon. Mike Moore has joined the company to assist with efforts in fundraising, corporate structuring, contract work and business development. Mike's 15+ years of experience in providing corporate and transactional services to private and public technology companies immediately provides value for the company. Mike completed an accelerated JD/MBA program from SUNY-Buffalo, graduating in the top 10% of each class where he was also appointed to Law Review and Beta Gamma Sigma. In addition, Stephen Spalding has joined us to provide assistance with our financial reporting, budgeting, cash flow management and other finance-related matters. Stephen has over 20 years of experience with a significant focus on growth-oriented technology ventures. He is a Certified Internal Auditor with a B.S. in Finance, Physics, and Mathematics from Eastern Illinois University and an MBA in Quantitative Analysis from the University of Arizona. Stephen was previously a Partner and regional practice director with Deloitte and Touche's Controls Technology Development and was also a founding partner with KPMG's Strategic Services & Enabling Technologies Practice.

On the product side, the market acceptance and success rate for Nexicon's GetAmnesty(TM) product is rapidly increasing. GetAmnesty is one of our flagship products and a proven solution for copyright holders to recover revenue lost due to digital piracy. The GetAmnesty program provides a way for users who have violated DMCA laws to "settle" with the copyright owner by paying a nominal settlement amount for each infringement. I am excited to report that Nexicon is generating gross revenue from this product on a daily basis. Based on this success and our projections we anticipate that revenue from just one of the already existing users of this technology can generate more than $1 Million in 2010. We continue to see strong potential for GetAmnesty in all target markets with equal and greater success, including motion picture, recording, e-publishing, software & gaming, and more.

I am also excited to report that I will be traveling to Maryland and Washington D.C. in early November to meet with a large governmental agency. We are restricted in naming which department this is, but we can say that we've received verbal approval at all levels for an exciting government project that will showcase the MARC(TM) Technology Platform in a way never before seen. We expect to be under contract by late November.

In addition, our partner CSI Expertise is continuing to work closely with governmental entities in France. This month, one of these entities will begin a four-week detailed testing of Nexicon's DigitalRanger(TM) Law Enforcement solution. We have proven our capabilities in an earlier proof of concept with this organization, and I look forward to reporting on a successfully completed test.

Nexicon's technology was recently featured at the 3rd International Cyber Investigation Convention, JFIN 2009, which is organized by the International Experts Association for Numeric Investigations (AFSIN). World-renowned cybercrime expert and Nexicon partner Bertrand (Burt) Marchioro, president of CSI Expertise, presented Nexicon's technology to a closed audience of state attorneys, judges, cyber detectives and court experts from France, Canada, Belgium, Luxembourg , Monaco and Switzerland. The presentation received a resounding ovation from the attendees and has already generated strong interest from multiple country representatives who attended the meeting. I expect revenues from the public sector for our current product offerings to exceed that of the private sector by end of 2010.

The media industry also continues to be a strong marketplace for Nexicon's technology. We are currently conducting a significant test for a global entertainment company in the motion picture and television sectors. This potential client is evaluating Nexicon's DigitalRanger, DataView(TM) and Business Intelligence products for one movie and two television shows. Initial results have been promising, and we're looking forward to a successful finish. We also recently concluded a test for another major player in the media entertainment space, and the feedback we received was extremely positive with respect to the quality and quantity of the data delivered from DigitalRanger and DataView.

These recent successes for Nexicon's products and services are just a sample of the kinds of projects we've been working on, but by no means is an exhaustive list. We intend to continue to specialize in providing the very best in Internet intelligence for clients across a multitude of industries. In 2010, we will broaden our identity to become a provider of the very best in network security for enterprise, B2B and home users. To help us achieve these goals, we have begun discussions with a renowned marketing firm. They will guide us in taking these offerings to market in 2010 along with a re-branding of the entire company (perhaps in connection with a restructuring) that will enable us to differentiate ourselves from the competition and develop a corporate identity that will become synonymous with Internet intelligence and security.

From a reporting standpoint, we have determined that there are alternative means to achieve OTC Bulletin Board status in a more efficient manner which will benefit the company and our shareholders. We are currently evaluating those options and expect to move forward on this effort before end of year.

When I look forward to 2010, I anticipate that Nexicon as a well-capitalized, professionally staffed operation clearly has the potential to generate strong revenue and earnings. Our margins can be incredibly robust, in some instances reaching projections of 60%. We are more than capable of achieving $20MM+ in revenue and profitability during 2010 with the timely completion of our funding (described below).

Our company has started to make a dramatic turnaround in the past year, and I certainly see promising days ahead. I know that Nexicon's technology is world-changing and we need to separate ourselves from the past, and move forward with a new team, in a funded, "clean" - and reporting entity.

The delays in completing our funding transaction that is in progress, while not under our control or a result of actions we have or have not taken, are frustrating. We are however optimistic that this can be completed in the current quarter along with a near-term infusion of bridge financing as part of the larger funding transaction.

With great technology, an emerging new team of experienced professionals, a new image, and a dedicated marketing effort our future can be filled with extraordinary potential.

Thank you again for your continued support of our vision and mission.

Very truly yours,

Samuel M. Glines

President and CEO

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SAM GLINES

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SOURCE Nexicon

http://www.nexiconinc.com

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