Strategic Investor Crivello Group Agrees to Termination of Warrant for 10 Million Shares without Consideration
December 26, 2007
Titan Global Holdings, Inc. ("Titan") (OTCBB:TTGL), a high growth diversified holding company, today announced that in order to provide greater clarity and transparency as to its balance sheet and operations and to substantially reduce non-cash charges, Titan will take steps to simplify its financial structure, including the termination of a warrant for 10 million shares to a strategic investor. The initiative is designed to help Titan accelerate its high growth business plan and continue to build shareholder value.
To support this initiative, Crivello Group, LLC, ("CG"), Titan's strategic investor, agreed to the immediate termination of CG's warrant to purchase 10 million shares of Titan's common stock at a price of $1.30 per share without consideration. Titan issued CG the warrant (cash or cashless), exercisable for a period of 10 years, as consideration for CG developing and presenting Titan with the opportunity to purchase Appalachian Oil Company ("Appco") in July, 2007.
Given current SEC reporting requirements, warrants can result in derivative liabilities which create large non-cash charges. As well, convertible debt instruments can create large non-cash charges. Therefore, Titan's Board of Directors concluded that for increased transparency with its investors and strategic parties and companies considering business relations with any of Titan's subsidiaries, it was imperative Titan reduce and/or mitigate the impact of such instruments.
Titan will work with strategic investors and warrant holders to eliminate or reduce the impact of these instruments during its second quarter of Fiscal 2008. As of November 30, 2007, Titan had 57,204,809 common shares outstanding.
The warrant termination is consistent with Crivello Group's long-term support and strategic assistance for Titan and to enhance shareholder value. For example, in 2005, CG procured for Titan the purchase of Oblio Telecom, Inc. ("Oblio"). In consideration of the stock exchange transaction and the extension of financing to complete the purchase of Oblio, Farwell Equity Partners ("FEP"), an affiliate of CG, was issued 66 million shares of Titan. Several months later, once Titan's auditors concluded that the stock issuance would result in significant adverse accounting treatment to Titan and FEP, CG agreed to rescind the issued common stock. CG and its affiliates received no consideration for the contribution of the Oblio transaction to Titan and required financing.
"Our affiliated investment groups have made great contributions to Titan for almost 5 ½ years," said Frank Crivello, Managing Member, Crivello Group, LLC. "We continue to regard Titan's share price as a compelling value proposition, and we welcome the chance to work with the Company's management to continue to provide the kind of strategic assistance that has helped Titan grow from a market cap of just $2.5 million when we started work to its current market cap of $87 million."
"As Titan's stock price appreciates and achieves greater liquidity, our ability to engineer larger and more opportunistic acquisitions will be enhanced," said David Marks, Chairman of Titan Global Holdings, Inc. "We are privileged for the opportunity to work over an extended period with so many fine investors. The support and counsel of our long term investors has been integral to the success we have achieved to date."
Mr. Crivello concluded: "As we have always strived to act in the best interests of Titan and its shareholders, David and I agreed to take this action today to send a clear and strong message that we are committed to building Titan's long term shareholder value for all of Titan's shareholders."
"Today's action will provide additional resources as our subsidiaries each focus on and execute individual business plans," said Bryan Chance, President and Chief Executive Officer of Titan Global Holdings.
About Titan Global Holdings
Titan Global Holdings is a diversified holding company with a dynamic portfolio of subsidiaries spanning international telecommunications, electronics and homeland security, consumer products and energy resources. The Company takes advantage of valuable synergies between its subsidiaries to maximize revenue growth, internal development and strategic acquisitions. In fiscal 2007 Titan generated in excess of $111 million in revenues on a consolidated basis and projects fiscal 2008 revenues up to $747 million.
Titan's operating divisions include the following:
Titan's Telecommunications Division addresses a range of high-growth markets in the telecommunications, wireless and mobile segments. Companies include Oblio Telecom, Inc. the second largest publicly-owned company focused on the international prepaid telecommunications segment, StartTalk, Inc., Pinless, Inc., Titan Wireless Communications, Inc. and Ready Mobile.
The Titan Global Energy Division aggregates traditional and next-generation energy and fuel assets that can provide significant opportunities for growth in one of the world's largest and most critical markets.
Titan Global Brands integrates, protects and expands brand management capabilities to leverage and optimize growth across Titan's worldwide distribution channels. We own or manage more than 100 brands that are distributed through efficient, overlapping and expansive distribution channels.
Titan Card Services capitalizes on the burgeoning multibillion dollar international prepaid money transfer sector. The Card Services division provides a seamless brand extension for Titan's growing family of prepaid products, currently sold through a nationwide network of more than 86,000 retailers.
Titan's Electronics and Homeland Security Division includes Titan PCB East, Inc. and Titan PCB West, Inc. These companies specialize in the manufacture of advanced circuit boards and other electronic products for classified military and defense department customers, and other high-tech clients.
For more information, please visit: www.titanglobalholdings.com.
For investor-specific information and resources, visit http://www.trilogy-capital.com/tcp/titan/ or http://www.b2i.us/irpass.asp?BzID=1314&to=ea&s=0.
To view current news, visit http://www.trilogy-capital.com/tcp/titan/quote.html. To view an investor fact sheet about the company, visit http://www.trilogy-capital.com/tcp/titan/factsheet.html.
Forward-Looking Statements
Safe Harbor Statement Under the Private Securities Litigation Reform 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 rates 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.
