affidavit of todd bryant

IN THE UNITED STATES DISTRICT COURTFOR THE SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

UNITED STATES OF AMERICA Case Number: 3:12-CV-95

Plaind ff,

vs.

FESUM OGBAZION, et al.

Defendants.

Judge Timothy S. Black

AFFIDAVIT OFTODD BRYANT

Now comes Todd Bryant, having been duly sworn and cautioned in accordance with law,

hereby deposes and states that the following is -true, to the best of his personal knowledge:

1. I make the statements in this affidavit upon my own personal knowledge, am of requisiteage and capacity to testify as to all matters herein stated, am under no legal disabilitywhich would preclude -me from testifying and, if called upon to do so, would testify as setforth in this affidavit.

2. I am the General Counsel of the Defendants, ITS Financial, LI,C, ICA Financial, 1.1.,C,and Tax Tree, LLC. I have held that position since October 2010.

3. ITS Financial, currently has 24 employees, all of whom will lose their current jobsif the company is forced to shut down. If the appeal is successful, it is unlikely that theseindividuals would be available or willing to be re-hired to work for the company again.

4. The retail tax preparation business is seasonal in nature, and has a very small time frame,taking place largely between January and March (with business slowing significantly byMarch/April). Approximately 90% of a retail tax preparation company's annual incomeis earned during this 8-10 week window.

5. If ITS Financial is not able to operate for even one tax season, having lost its employees,annual revenue, and franchise relationships, the company would not survive.

EXHIBIT

Case: 3:12-cv-00095-TSB Doc #: 147-1 Filed: 11/08/13 Page: 1 of 3 PAGEID #: 7547

Accordingly, even if an appeal were successful, the company would no longer have anyviability and would have effectively lost its ability to operate by that point.

6. To date, ITS Financial, 1,I,C and Tax Tree, LLC have incurred operating expenses ofapproximately $3,200,000 since April 1, 2013 preparing for the upcoming tax season thatstarts in January 2014. This has included: the purchase and customization of softwareand other electronic infrastructure; holding a franchisee convention to present theproposed marketing, compliance, operations, and business plans for the upcoming year;labor to meet with vendors and other third parties to plan and negotiate relationships forthe upcoming season, and other general operations.

7. ITS Financial, LLC started preparing for the upcoming season before the Court issued itsDecision, because it would not be feasible to wait, as it would not allow enough time toprepare if the company waited too late into the year.

8. 10 to 12 new licensees entered into business relationships with the company, and haveinvested their funds in preparing to open► stores, including the signing of leases forcommercial space, in reliance on being able to operate in the upcoming season as InstantTax Service tax preparers.

9. If ITS Financia1,1,1„C shuts down, approximately 150 tax preparers (former franchisees)would .potentially operate without any guidance, direction, or oversight .from ITScorporate.

10. Tax Tree is currently still receiving tax refunds from the IRS from last season (January-April 2013) on an almost daily basis. Federal laws and regulations require Tax Tree todisburse these funds to its clients within 3 days of receiving said refunds.

11. In addition, the Injunction as it is currently written creates confusion for the Defendantsas to what they are able. to do in terms of winding down the business. Defendants areunsure as to whether they can continue to pursue litigation of claims that arose prior tothe Injunction, or whether they can continue to collect receivables and pay debts thataccrued prior to .the injunction.

FURTHER AFFIANT SAYETH NAUGHT

Dated: l‘t-4

2


STATE OF OHIO) SS:

COUNTY OF GREENE

Before me, the undersigned, a Notary Public in and for said County and State, personallyappeared Todd Bryant, who, being duly sworn on his oath, stated that the facts set forth in theforegoing affidavit are true.

Witness my hand and Notary Seal this

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,44,41W. 1 CHRISTINE M. SCHMENK-WOODS•• i Notary Public, State of Ohio

I; 1:.„. , el My Commission Expires Nov.20, 2015t•„,,,. Z Of (:)/

3

day of November, 2013.

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kAgr.Notary Public

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affidavit of todd bryant

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