SCTN Responds to TII Lawsuit

LAS VEGAS, Sept. 4  /PRNewswire-FirstCall/ -- On August 30, 2007, a lawsuit was filed in the United States District Court for the District of Nevada by The International Investor, K.S.C.C., commonly known as TII, a Kuwaiti publicly traded company with a multi-billion market capitalization, against Schimatic Cash Transactions Networks.com Inc. (OTC:SCTN) and Phoenix Technology Holdings Inc., each of whom supply end to end technology for consumer incentive systems to TII.  SCTN and Phoenix emphatically and absolutely deny any wrongdoing in this matter and fully expect to be vindicated in the courts.

"These incorrect, speculative and unfounded accusations will be vigorously defended using facts that can be verified and substantiated rather than the fiction that was utilized in the TII complaint filed against SCTN and Phoenix. Their complaint has many significant incorrect, inaccurate and untrue statements, including allegations of the existence of certain contracts, which in fact were never signed, allegations of conspiracy with TII's own employees, including their CEO and COO, which never happened, allegations of Phoenix's and SCTN's participation in not furthering TII's program and breach of contract, which that never happened," stated Miki Radivojsa, CEO of SCTN.

Phoenix and SCTN were shocked by these allegations because they do not know, nor do they care, what the TII trade secrets are since they derive no commercial benefit in using trade secrets for a loyalty program because Phoenix and SCTN are technology suppliers, not a marketing agency or a bank. Phoenix and SCTN have completed the Selektpoints(TM) card technology, POS terminal technology and loyalty processing server technology and were fully supporting TII client integrations and prospecting to new potential TII clients, as agreed, when they learned of the claim filed by TII against the companies.

"What is most troubling about these claims is that we are being accused of stealing trade secrets, and yet TII has not returned any of the Phoenix's and SCTN's intellectual property, which they are obligated to do," stated Mr. Radivojsa.

Phoenix and SCTN have been informed today that TII has recently been de-listed from the Kuwait stock exchange for failure to file their second quarter 2007 financials.  Phoenix and SCTN are unsure of what role this plays in the lawsuit filed against them by TII, but know that it is extremely costly to run a world-wide program utilizing Phoenix's and SCTN's technology, and these two factors may have played a role in its decision to sue Phoenix and SCTN in order to avoid their contractual arrangements and obligations to Phoenix and SCTN.

Schimatic owns patents granted in the United States, Canada, Mexico, Australia and Japan for incentives on a mobile computing device.  The SCTN technology supports loyalty, gift card and punch card programs for smart cards, magnetic cards and cell phones covering a market with revenue potential of over $10 billion by 2010.  SCTN has been developing a best of breed technology for over ten years and has spent over $70 million in doing so.

Phoenix and SCTN were weeks away from deploying the TII system in Dubai and Pakistan and were still supporting the TII system when the complaint was filed.  TII currently owes Phoenix approximately $1.5 million in past approved invoices and Phoenix has projected revenues of over $20 million from TII in 2008 and 2009.  After repeated attempts to obtain an exclusive license and a reduction in fees, TII has tried to intimidate Phoenix and SCTN by submitting false accusations and claiming that Phoenix and SCTN are responsible for the internal issues of TII.  At no time prior to filing its complaint did TII ever communicate the alleged claims against Phoenix and SCTN to Phoenix or SCTN. Phoenix and SCTN are stunned at the lack of professionalism and business manners shown by TII.

"Around the beginning of 2007, we actually had preliminary buyout discussions with TII using our financial advisors at the time, Convergence Capital.  To have TII claim there is a conspiracy is ridiculous since there was full disclosure of all agreements and intentions.  We will continue to move Phoenix and SCTN forward in pursuing business development and strategic partnerships for both SCTN and Phoenix to bring shareholder value," added Miki Radivojsa.

TII knew that these false accusations could potentially cause considerable damage to Phoenix's and SCTN's reputations.  Phoenix and SCTN plan to vigorously defend and counter sue TII for breach of contract, fraud, interference with contractual relations, misappropriation of trade secrets, conversion, unjust enrichment and to seek both compensatory and punitive damages well in excess of $100 million.  It is expected that these damages will continue to grow and increase significantly the longer that TII continues this bogus lawsuit and Phoenix and SCTN will plead with the courts to expedite this lawsuit to trial.

  Contact:
  Bernard McHale
  702-361-3624

  http://www.b2i.us/irpass.asp?BzID=748&to=ea&s=0

DATASOURCE: Schimatic Cash Transactions Networks.com Inc.



CONTACT:  Bernard McHale, [phone], for Schimatic Cash

Transactions Networks.com Inc.



Web site:   http://www.sctn.com/

http://www.phoenix-tec.com/ 

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