Titan Global Holdings Executes Settlement Resulting in Significant Gain of $4.5 Million Monday January 8, 4:25 pm ET Settlement with F&L Results in Reduction of 3 Million Fully Diluted Shares
DALLAS--(BUSINESS WIRE)--Titan Global Holdings, Inc. ("Titan") (OTCBB:TTGL - News), a high-growth diversified holding company, announced that the Company's Oblio Telecom division has reached an agreement with F&L, LLP, affiliates of whom Titan acquired Oblio from, to reduce and fix the liability for the issuance of Oblio preferred shares from $9 million to a principal amount of $4.5 million. ADVERTISEMENT
As a result of the settlement, Titan will recognize a one-time income gain of $4.5 million in its Q2 of fiscal 2007, reducing its fully diluted outstanding shares by a total of 3 million shares.
The completion of this settlement has further de-leveraged Titan's Oblio business unit and significantly improves Titan's position to exploit organic and strategic opportunities for the acceleration of business operations and revenue-growing activities.
The remaining $4.5 million of preferred shares held by F&L are convertible at $1.50 per share. In addition, Titan issued 250,000 shares of common stock to F&L. In connection with the change to the preferred stock, F&L agreed to extend the maturity date of the $4,822,850 of notes payable by Oblio to F&L to March 31, 2009, and increase the interest rate to 5% per annum. Oblio will make monthly payment of $178,930 on the notes, commencing January 31, 2007.
Recently, Titan also announced that it successfully completed a new $15 million revolving credit facility and $7.6 million senior term loan with Greystone Business Credit II, LLC of its obligations to Capital Source Finance that saved the Company more than $3.6 million in annual cash flow, reduced outstanding shares by 1.25 million shares, and reduced the fully diluted outstanding shares more than 3.5 million shares.
"The completion of our refinance with Greystone Business Credit II enabled us to complete our longstanding discussions with the sellers of Oblio relating to their preferred shares," said David Marks, Chairman of Titan Global Holdings. "We have and will continue to work with F&L to recover our federal excise taxes and assist F&L in the collection of its federal excise taxes for those periods when it owned Oblio."
F&L, LLP is owned by the original owners of Oblio, a market leader in prepaid telecommunications and the second largest publicly-owned company focused on the international prepaid telecommunications space.
"Our team will continue to vigorously improve our balance sheet and working capital position. As a result of this settlement and continued efforts, Titan will have more flexibility to exploit organic and strategic opportunities to add shareholder value," said Bryan Chance, President and Chief Executive Officer of Titan Global Holdings.
Titan Global Holdings is a diversified holding company with a dynamic portfolio of subsidiaries that capitalize on the ever-expanding worldwide demand for new communications and connectivity services and products. The Company's six wholly owned subsidiaries are capitalizing on a broad range of technological innovations spanning telecommunications, electronics and homeland security. Derived from internal development and strategic acquisitions, Titan delivers cost-effective, secure, and environmentally-friendly solutions for customers around the world.
About Titan Global Holdings
Titan Global Holdings, Inc. ("Titan") (OTCBB:TTGL - News) is a high-growth diversified holding company with a dynamic portfolio of companies engaged in emerging telecommunications markets and advanced technologies. In its last fiscal year Titan generated in excess of $109 million in revenues on a consolidated basis.
Titan's Oblio Telecom Inc. ("Oblio") telecommunications subsidiary, based in Richardson, Texas, is a market leader in prepaid telecommunications products and the second largest publicly-owned international telecommunications company focused on the prepaid space. Oblio leverages strategic agreements with Tier 1 telecommunications leaders Sprint and Level3 to supply its brand-name prepaid calling cards. Annually Oblio sells an estimated 35 million of its brand-name prepaid calling cards through its established distribution channels estimated at more than 60,000 retail outlets.
Titan Wireless, Inc. ("T Wireless") is Titan's wireless subsidiary and is a mobile virtual network operator ("MVNO"). T Wireless sells its MVNO prepaid wireless products and wireless services through Oblio's established distribution channels. Titan's Electronics and Homeland Security division specializes in advanced manufacturing processes to provide commercial production runs and quick-turn delivery of printed circuit board prototypes for high-margin markets including Homeland Security and high-tech clients.
Safe Harbor Statement Under the Private Securities Litigation Act of 1995 -- With the exception of historical information, the matters discussed in this press release are forward-looking statements that involve a number of risks and uncertainties. The actual future results of TTGL could differ significantly from those statements. Factors that could cause actual results to differ materially include risks and uncertainties such as the inability to finance the company's operations or expansion, inability to hire and retain qualified personnel, changes in the general economic climate, including rising interest rate and unanticipated events such as terrorist activities. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms, or other comparable terminology. These statements are only predictions. Although we believe that the expectations reflected in the forward-looking statements are reasonable, such statements should not be regarded as a representation by the Company, or any other person, that such forward-looking statements will be achieved. We undertake no duty to update any of the forward-looking statements, whether as a result of new information, future events or otherwise. In light of the foregoing, readers are cautioned not to place undue reliance on such forward-looking statements. For further risk factors see the risk factors associated with our Company, review our SEC filings.
Contact: Trilogy Capital Partners Financial Communications: Paul Karon, Toll-free: 800-592-6067 paul@trilogy-capital.com
-------------------------------------------------------------------------------- Source: Titan Global Holdings, Inc.
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