Titan Global Holdings Announces U.S. Treasury Department Concedes Federal Excise Tax Dispute Oblio Subsidiary Anticipates Tax Rebate in Excess of $2.7M Accrued Through May, 2006 Titan Global Holdings, Inc. ("Titan") (OTCBB: TTGL) today announced the United States Treasury Department formally conceded the legal dispute over federal excise taxes on long-distance telephone service. According to the United States Treasury Department, the Internal Revenue Service will process refunds and interest for all taxes paid for long-distance service during the last three years.
Treasury Secretary John Snow last week stated, "Today is a good day for American taxpayers; it marks the beginning of the end of an outdated, antiquated tax that has survived a century beyond its original purpose, and by now should have been ancient history.
"The Federal Appeals courts have spoken across the board. It's time to 'disconnect' this tax and put it on the permanent 'do not call' list.
"In addition to ending the litigation, I would like to call on Congress to terminate the remainder of this antique tax by repealing the excise tax on local service as well."
Oblio Telecom, Inc. is a wholly owned subsidiary of Titan and has been paying federal excise taxes of 3% of gross revenues generated from communications services provided to its customers. These excise taxes have been included in the cost of sales as reported in historical financial statements. Based on the Treasury Department ruling, Oblio believes it is entitled to a refund in excess of $2.7M through May 7, 2006. Already Oblio has applied for a refund in excess of $1.5M for the period through November, 2005.
"The removal of the federal excise taxes on our services will proportionately increase our operating margins in future periods," stated Bryan Chance, Chief Financial Officer of Titan Global Holdings. "Additionally, we will prepare an additional claim for federal excise taxes paid subsequent to December 2005 as well."
"The federal excise tax on telephone calls was put into place over 100 years ago. We are very pleased to see the Treasury Department has agreed to eliminate these excise taxes. Upon receipt of our refund, we intend to use the proceeds to reduce our corporate debt and our monthly interest expense," said Kurt Jensen, President and CEO of Titan's Oblio Telecom division. "Our customers ultimately win from this decision as we will have more resources to create new, innovative products to meet our customers' needs."
About Titan Global Holdings, Inc.:
Titan operates through three divisions -- Oblio Telecom, Inc., Titan PCB East, Inc. and Titan PCB West, Inc., (collectively, "Titan PCB"). Oblio is engaged in the creation, marketing, and distribution of prepaid telephone products for the wire line and wireless markets and other related activities. Titan PCB is a printed circuit board manufacturer providing competitively priced time-sensitive, quality products to the commercial and military electronics markets. Titan PCB offers high layer count, fine line production of rigid, rigid-flex and flex PCBs. Titan PCB targets quick turn and standard delivery needs from prototype, pre- production through production, using various standard and advanced materials. Titan PCB combines the strengths of its design for manufacturing (DFM), repetitive quality and supportive customer service with an extremely cost-effective pricing structure. With this competitive edge, Titan PCB is not only a reliable resource for all printed circuit board requirements but also a technical source unmatched in today's PCB supply chain.
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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.
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