The Prepaid Press - March 15, 2008 - (Page 13)

CALLING CARDS March 15 · 2008 - 13 The Splitting of a Titan By Gene Retske Oblio and Communications to Spin Off dollars” of activated cards in the hope that Oblio would become insolvent, and the distributors would not have to pay for the cards. Another suit, for trademark infringement (3-08cv00278), was also filed on February 15. The filing names Total Call International, Inc., R Castro, PhoneCardsAvenue Inc., Therichcom. these cards. It asks for treble profits or damages, interest, and punitive damages. Oblio had filed an earlier suit (3-08cv00120), on January 28, 2008, against Hawaii Global Exchange, Inc. alleging Breach of Contract. Hawaii has asked that this case be returned to state court in Texas. So far three suits have been filed by Oblio in the Texas Northern District. com, Pinshark.com, Javid Calcatti, Spacetel Communications Inc., Phone Card Hotline, Touch Tell Inc., Hawaii Global Exchange Inc., Transpac Telecom Inc., Diamond Phone Card Inc., Detroit Phone Card Inc., and Raza Telecom Inc. In this suit, Oblio claims that its trademarked brands, such as TCC Picante, 24/7, and HELLO ASIA, are sold in over 60,000 locations in 38 states. It says that it had previously gotten an injunction against Total Call, but that Total Call is infringing, or contributing to the infringement of its HELLO ASIA trademark by acting as the network provider to distributors, Touch Tell, PacTel, Tanspac, Diamond, Detroit and Raza, who sold branded cards to retailers, R. Castro (superpinoy.com), PhoneCardsAvenue, Therichcom, Pinshark, Callingcardstation, SpaceTel and Phone Card Hotline. The suit references these cards as “counterfeit.” It asks for an immediate injunction to stop the sale and distribution of Titan Global Holdings, Inc. (OTCBB:TTGLE), the parent company of prepaid calling card company, Oblio, is going to separate the company into four different publicly owned companies. While all of the operating divisions had financial problems, the Communications Division’s $18.7 million loss was the biggest. The company said that the split would create “significantly greater opportunities” for building shareholder value. Titan expects to file with the SEC to register each entity as a separate public company March 31, 2008. The company will set a date to determine which shareholders are eligible once registration with the SEC is complete. The distribution of these shares may be taxable to the recipient as a dividend, as more fully described at the time of the distribution. the Planet Direct brand name. Chance said that Titan lost $18.7 million on revenues of $22.3 million in the Communications Division in the first quarter of 2008, compared to revenues of $24.5 and a loss of $126,000 in the same quarter of 2007. The 2008 loss included a “goodwill impairment” charge of 14.6 million. Chance blamed the losses on uncollected and reserved accounts receivable in its lease network operations. Other Titan Divestitures Other divisions that will be spun off include: Titan Electronics, Inc. (Titan PCB West), Titan Electronics Inc., and NEO Electronics (Titan PCB East, Inc., and its Titan Nexus, Inc.). Titan has already announced its intentions to sell USA Detergents, Inc. and said it is in active discussions with various interested parties. Titan also intends to divest Titan Apparel Inc., either by selling it, or creating a separate IPO. Once these transactions are completed, Titan’s primary asset will be its Energy Group, which includes Appalachian Oil Company, Inc. Titan will then rename itself to Xnergy Corporation and focus on its core energy operations and strategic acquisition opportunities in the energy space. In the quarter ended November 30, 2007, Titan’s Energy Group produced $90 million in revenues. “This strategic plan will enable each separate business to present its individual financials to suppliers and customers alike in a manner that will provide greater financial transparency, clarity and confidence,” said David Marks, Chairman. Oblio to be Spun Off “Titan has a unique opportunity to restore and increase the Company’s market capitalization,” said Bryan Chance, President and Chief Executive Officer of Titan Global Holdings. “While we have taken bold and aggressive steps to put the Communications Division back on track, the reality is that the result of these events was substantial and long term. This reorganization will enable each of our divisions to stand alone to execute on each division’s opportunities. We “While we have taken bold and aggressive steps to put the Communications Division back on track, the reality is that the result of these events was substantial and long term.” believe this strategy will restore shareholder value as our ‘pieces’ are presently worth more than the ‘whole.’” Chance said that the various subsidiaries comprising Titan’s Communications Division will be spun off to Titan’s shareholders, and each existing Titan communication unit will become a division of Pinless, Inc., a wholly owned subsidiary of Titan. Pinless, Inc. will be renamed to Planet Direct, Inc. and its prepaid phone card products will be marketed under Law Suits by Oblio Titan has filed suit in the Federal District of North Texas against a former employee and distributors, alleging that they conspired against Oblio, violating the RICO Act, committing wire fraud and illegal racketeering activities. At the press conference announcing the breakup, Chance told The Prepaid Press that “very serious acts were perpetrated against our communications division and we intend to prosecute those acts to the fullest extent available under the law.” Chance said that the acts had “significant impact” to Titan’s market capitalization, and its operations and its ability to continue to provide prepaid calling cards to its customers. Chance declined further comment on the suits. So far three suits have been filed by Oblio in the Texas Northern District. One suit (3-08cv00279), filed on February 15, 2008, alleges RICO, and names as defendants, Zuber Patel, Touch Tell Inc., Hawaii Global Exchange Inc., Diamond Phone Card Inc., Detroit Phone Card Inc., Raza Telecom Inc., Asia Telecom Corporation and Transpac Telecom Inc. The filing says that Zuber Patel worked for Oblio as its Network Engineering Director, and controlled the loading of time and money onto its prepaid calling cards. According to the complaint, Patel defrauded Oblio by a variety of “schemes,” including selling cards to the distributors that had been loaded with more than the face value of the cards. The complaint says that Patel then gave the distributors named in the suit “unauthorized” discounts. The complaint says that Patel also created network disruptions to give the distributors an excuse to pay slowly, or not at all, for the cards sold to them. Other allegations in the complaint say that Patel shipped “thousands of R ® • • • • CONSULTING Stored Value Cards Prepaid Phone Cards VoIP- IXC & CLEC Projects MVNO & Wireless Projects COMPLIANCE • 499A & 499Q Filings • Bill Analysis & Disputes: USF, TRS, NANPA, LNP & FCC Charges • Payphone DAC: Compliance & Audits • Prepaid Phone Cards • Stored Value Cards • Telecom Taxes & Fees • VoIP Compliance FCC 214 - $150 plus costs IXC & CLEC Certi cations Money Transfer Licenses Satellite & Wireless Licenses REGNUM GROUP, INC., MIAMI, FLORIDA T: .. ·F : .. 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Table of Contents Feed for the Digital Edition of The Prepaid Press - March 2008

The Prepaid Press - March 2008 tppEXPO’08 Slated for August 19-21 AT&T Strikes Back Contents The Retske Report: Net Neutrality 5 Minutes With Terry Maher, NBPCA Counsel Regulatory Rundown: FCC Enforcements Prepaid Wireless Roundup Prepaid Wireless in Brief tppEXPO’08 Spotlight BlackBerry Prepaid Option to be Offered Virgin Mobile USA Ringbacks Growing The Splitting of a Titan The State of Prepaid Technology: Part II – The Other Prepaid Calling Spot Rates Calling Cards in Brief IVR and Stratus to Offer SIP Platform PhoenixSoft Completes Integrated IP Transcoding The Legal Line Web Streamlines Bill Pay & Prepaid Distribution Travelex Debuts New Foreign Currency Packs TSYS and Telrock to Provide Mobile Solutions Payments in Brief NBPCA Offers Tips to Fight Money Laundering Hypercom Responds to Ingenico Inquiry Kiosks Change the Face of Prepaid Prepaid 101: Prepaid Wireless Coinstar to Expand Centers in Wal-Mart Locations Meta and MoneyGram Partner NRF Battles Retail Crime Retail Focus in Brief Our Advertisers Contact Us

The Prepaid Press - March 2008

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