C2 Global Technologies Inc.
OTC Bulletin Board : COBT

C2 Global Technologies Inc.

March 31, 2010 20:30 ET

C2 Global Technologies Inc. Reports Fiscal Year 2009 Results

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

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