TORONTO, ONTARIO--(Marketwire - March 31, 2010) - C2 Global Technologies Inc. ("C2" or the "Company") (OTCBB:COBT) today reported its financial results for the year ended December 31, 2009. All amounts are stated in US dollars.
For the year ended December 31, 2009, the Company had a net loss of $1.3 million or $0.06 per common share, basic and diluted, compared to net income of $5.8 million or $0.25 per common share, basic and diluted, for the year ended December 31, 2008.
During 2009 the Company's revenue from continuing operations was $6.0 million, compared to $17.6 million for 2008. All of the revenue in 2009 was earned by the Company's subsidiary, Counsel RB Capital, LLC ("Counsel RB"), which commenced operations in the second quarter of 2009, and in which the Company holds a 75% interest. All of the revenue in 2008 was from settlement and license agreements relating to the Company's intellectual property.
The following significant events occurred during the year ended December 31, 2009:
- In the first quarter of 2009, the Company established Counsel RB, which specializes in the acquisition and disposition of distressed and surplus assets throughout the United States and Canada, including industrial machinery and equipment, real estate, inventories, accounts receivable and distressed debt. Counsel RB also arranges traditional asset disposition services such as on-site and webcast auctions, liquidations and negotiated sales, for which it earns commission revenue.
- In May 2009, the Company invested approximately $2.6 million to acquire an approximately 5% interest in the brand, inventory, intellectual property and other assets of Polaroid Corporation, pursuant to a Chapter 11 reorganization in a U.S. bankruptcy court. C2's interest is managed by Knight's Bridge Capital Management L.P., an affiliate of the Company's parent, Counsel Corporation.
- In August 2009, the Company's wholly-owned subsidiary, C2 Communications Technologies Inc., filed a patent infringement lawsuit against PAETEC Corporation and several other U.S. telecommunications carriers. The complaint, which was filed in the Eastern District of Oklahoma and subsequently transferred to the Eastern District of Texas, alleges that the defendants' services and systems utilizing VoIP infringe the Company's U.S. Patent No. 6,243,373. As of December 31, 2009, the complaint against PAETEC Corporation remains outstanding, the other carriers having been dismissed without prejudice during the fourth quarter of 2009. A trial date has not been set.
"We are very pleased with the progress of Counsel RB since it commenced operations in the second quarter of 2009", said Allan Silber, Chairman and CEO of C2. "As well, our investment in Polaroid Corporation has shown excellent returns due to its successful efforts to promote the iconic Polaroid brand and capitalize on its intellectual property", said Allan Silber, Chairman and CEO of C2.
Please see the Company's Annual Report on Form 10-K for the year ended December 31, 2009, filed with the SEC on March 31, 2010, for further information.
About C2 Global Technologies Inc.
C2's primary business is the development and licensing of its patents, which include two foundational patents in VoIP technology. C2 is also involved in the acquisition and disposition of distressed and surplus assets through its interest in Counsel RB Capital LLC. For further information, please visit C2's website at www.c2global.com.
Forward-Looking Statements
This release contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, as amended, that are based on management's exercise of business judgment as well as assumptions made by, and information currently available to, management. When used in this document, the words "may", "will", "anticipate", "believe", "estimate", "expect", "intend", and words of similar import, are intended to identify any forward-looking statements. You should not place undue reliance on these forward-looking statements. These statements reflect our current view of future events and are subject to certain risks and uncertainties as noted in our securities and other regulatory filings. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results could differ materially from those anticipated in these forward-looking statements. We undertake no obligation, and do not intend, to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of any unanticipated events. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance that our expectations will materialize. Many factors could cause actual results to differ materially from our forward-looking statements.
| C2 GLOBAL TECHNOLOGIES INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (audited) |
| |
| (In thousands, except share and per share amounts) |
December 31, 2009 |
|
December 31, 2008 |
|
| |
|
|
|
|
|
|
| ASSETS |
|
|
|
|
|
|
| Current assets: |
|
|
|
|
|
|
| |
Cash |
$ |
93 |
|
$ |
4,076 |
|
| |
Accounts receivable |
|
1,000 |
|
|
— |
|
| |
Note receivable |
|
653 |
|
|
— |
|
| |
Deposits |
|
300 |
|
|
— |
|
| |
Inventory – equipment |
|
442 |
|
|
— |
|
| |
Other current assets |
|
110 |
|
|
77 |
|
| |
Deferred income tax assets |
|
729 |
|
|
875 |
|
| |
|
Total current assets |
|
3,327 |
|
|
5,028 |
|
| Other assets: |
|
|
|
|
|
|
| |
Inventory – real estate |
|
1,396 |
|
|
— |
|
| |
Asset liquidation investments |
|
3,943 |
|
|
— |
|
| |
Investments |
|
2,788 |
|
|
242 |
|
| |
Goodwill |
|
173 |
|
|
173 |
|
| |
|
Total assets |
$ |
11,627 |
|
$ |
5,443 |
|
| |
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
|
| |
Accounts payable and accrued liabilities |
$ |
1,457 |
|
$ |
472 |
|
| |
Income taxes payable |
|
26 |
|
|
— |
|
| |
Debt payable to third parties |
|
4,626 |
|
|
— |
|
| |
Debt payable to a related party |
|
1,564 |
|
|
— |
|
| |
|
Total liabilities |
|
7,673 |
|
|
472 |
|
| |
|
|
|
|
|
|
| Stockholders' equity: |
|
|
|
|
|
|
| |
Preferred stock, $10.00 par value, convertible, non-redeemable, authorized 10,000,000 shares; issued and outstanding 592 Class N shares at December 31, 2009 and 594 shares at December 31, 2008; liquidation preference of $592 at December 31, 2009 and $594 at December 31, 2008 |
|
6 |
|
|
6 |
|
| |
Common stock, $0.01 par value, authorized 300,000,000 shares; issued and outstanding 22,718,074 shares at December 31, 2009 and 22,745,530 shares at December 31, 2008 |
|
227 |
|
|
227 |
|
| |
Additional paid-in capital |
|
274,706 |
|
|
274,761 |
|
| |
Accumulated deficit |
|
(271,287 |
) |
|
(270,023 |
) |
| |
Stockholders' equity before non-controlling interest |
|
3,652 |
|
|
4,971 |
|
| |
Non-controlling interest in subsidiary |
|
302 |
|
|
— |
|
| |
|
Total equity |
|
3,954 |
|
|
4,971 |
|
| |
|
Total liabilities and stockholders' equity |
$ |
11,627 |
|
$ |
5,443 |
|
The notes contained in our Annual Report on Form 10-K are an integral part of these condensed consolidated financial statements
| C2 GLOBAL TECHNOLOGIES INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
| (audited) |
| |
| |
Year Ended December 31, |
|
| (In thousands, except per share amounts) |
2009 |
|
2008 |
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| Revenue: |
|
|
|
|
|
|
| |
Patent licensing |
$ |
— |
|
$ |
17,625 |
|
| |
Asset liquidation |
|
5,991 |
|
|
— |
|
| |
|
Total revenue |
|
5,991 |
|
|
17,625 |
|
| |
|
|
|
|
|
|
| Operating costs and expenses: |
|
|
|
|
|
|
| |
Patent licensing |
|
29 |
|
|
10,729 |
|
| |
Asset liquidation |
|
4,138 |
|
|
— |
|
| |
Selling, general and administrative |
|
2,657 |
|
|
1,273 |
|
| |
Depreciation and amortization |
|
— |
|
|
20 |
|
| |
|
Total operating costs and expenses |
|
6,824 |
|
|
12,022 |
|
| |
|
(833 |
) |
|
5,603 |
|
| Earnings of equity accounted asset liquidation investments |
|
64 |
|
|
— |
|
| Operating income (loss) |
|
(769 |
) |
|
5,603 |
|
| Other income (expenses): |
|
|
|
|
|
|
| |
Other income (expense) |
|
(88 |
) |
|
442 |
|
| |
Interest expense |
|
(325 |
) |
|
(43 |
) |
| |
|
Total other income (expenses) |
|
(413 |
) |
|
399 |
|
| Income (loss) from continuing operations before the undernoted |
|
(1,182 |
) |
|
6,002 |
|
| Income tax expense (recovery) |
|
269 |
|
|
125 |
|
| Earnings of equity accounted investments (net of $0 tax) |
|
252 |
|
|
(38 |
) |
| Income (loss) from continuing operations |
|
(1,199 |
) |
|
5,839 |
|
| Loss from discontinued operations (net of $0 tax) |
|
— |
|
|
(12 |
) |
| Net income (loss) before non-controlling interest |
|
(1,199 |
) |
|
5,827 |
|
| Net (income) loss attributable to non-controlling interest |
|
(65 |
) |
|
— |
|
| Net income (loss) attributable to controlling interest |
$ |
(1,264 |
) |
$ |
5,827 |
|
| |
|
|
|
|
|
|
| Weighted average common shares outstanding |
|
22,723 |
|
|
22,907 |
|
| Weighted average preferred shares outstanding |
|
1 |
|
|
1 |
|
| |
|
|
|
|
|
|
| Net income(loss) per share: |
|
|
|
|
|
|
| |
Common shares |
$ |
(0.06 |
) |
$ |
0.25 |
|
| |
Preferred shares |
$ |
N/A |
|
$ |
10.19 |
|
The notes contained in our Annual Report on Form 10-K are an integral part of these condensed consolidated financial statements