SOURCE: Schimatic Cash Transactions, Inc.

September 27, 2007 09:30 ET

SCTN Aggressively Responds to Complaint Filed by TII and Menalco With Answer, Counterclaims and Crossclaims

LAS VEGAS, NV--(Marketwire - September 27, 2007) - Schimatic Cash Transactions, Inc. ("SCTN") (PINKSHEETS: SCTN) and Phoenix Technology Holdings, Inc. ("Phoenix"), as providers of patented loyalty technology (the "Patented Technology"), have filed a responsive pleading, including certain counterclaims and crossclaims, to the lawsuit filed against them on Thursday, August 30, 2007, by The International Investor, K.S.C.C. ("TII") and Menalco, FZE ("Menalco"). Phoenix and SCTN have denied all of the alleged charges and have filed the following counterclaims, among others, against TII and Menalco:

a)  Breach Of Contract;
b)  Breach Of Implied Covenant Of Good Faith And Fair Dealing;
c)  Unjust Enrichment;
d)  Conversion;
e)  Fraud;
f)  Negligent Misrepresentation;
g)  Misappropriation Of Trade Secrets;
h)  Federal Civil RICO;
i)  Nevada RICO;
j)  Civil Conspiracy;
k)  Unfair Trade Practices;
l)  Intentional Interference With Prospective Economic Advantage;
m)  Constructive Trust;
n)  Accounting;
o)  Declaratory Relief; and
p)  Injunctive Relief.

Phoenix and SCTN counterclaimed that "TII has intentionally, willfully, and maliciously interfered with the use, enjoyment and right to possession of the Patented Technology." TII has also ignored two demand letters sent from Phoenix and SCTN for TII to return all of the Patented Technology.

Phoenix and SCTN further counterclaimed that "The selektpoints concept is a market-driven configuration of the Patented Technology." The selektpoints concept cannot be deployed without the utilization of the SCTN Patented Technology or another deployment system that does not utilize the Patented Technology; however, such action by TII would constitute a breach of their current contract with Phoenix/SCTN and TII would have to make a significant and substantial investment in time, resources and funding to develop another system that does not utilize the SCTN Patented Technology.

Phoenix and SCTN further counterclaimed that "The SCTN software was developed over a period of more than 13 years at a cost of more than $70,000,000.00." The Patented technology is and will be especially valuable to large cap companies such as IBM, which just recently approved the SCTN Loyalty Central application for inclusion in their Global Solution Directory. This application is also in the process of being added to the IBM business partner application software, based on its technical validation.

Phoenix is projecting annual revenue earnings of approximately $100,000,000 within the next 5 years as a direct seller of the Patented Technology; however, the annual revenue is expected to be significantly higher for channel partners or retailers that utilize the Patented Technology and who typically mark up Phoenix's fees significantly. Phoenix/SCTN believe that TII and other companies are interested in acquiring the Patented Technology not only because of its marketing value but also for reasons that include the potential to earn significant recurring revenue, the ability to pursue new markets and the ability to gather data for marketing purposes. Although there can be no assurance of actual time frame, Phoenix and SCTN are actively positioning themselves for a buyout and believe that this will take place within the next 3 years.

Any statements made in this press release, which contain information that is not historical, are essentially forward-looking. Many forward-looking statements can be identified by the use of words such as "expects," "plans," "may," "anticipates," "believes," "should," "intends," "estimates," and other words of similar meaning. These statements are subject to risks and uncertainties that cannot be predicted or quantified and, consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks are detailed from time-to-time in filings with the Securities and Exchange Commission. There is no obligation to publicly update any forward-looking statements.

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