C2 Global Technologies Inc.
OTC Bulletin Board : ACRS
TSX : CXS

C2 Global Technologies Inc.

August 09, 2005 16:38 ET

C2 Global Technologies Inc. Reports Second Quarter Results

PITTSBURGH, PENNSYLVANIA--(CCNMatthews - Aug. 9, 2005) - C2 Global Technologies Inc. ("C2", formerly Acceris Communications Inc.)(OTCBB:ACRS) today reported its financial results for the second quarter ended June 30, 2005.

The Company's total operating revenue from continuing operations for the second quarter ended June 30, 2005 was $21.2 million, a decrease of 20 percent from $26.5 million in the second quarter of 2004. For the three months ended June 30, 2005, the Company had a loss from continuing operations of $8.1 million compared to a loss from continuing operations of $8.2 million for the second quarter of 2004. The Company's net loss was $8.1 million in the second quarter of 2005 compared to a loss of $8.2 million in the second quarter of 2004. The net loss per common share was $0.42 in the second quarter of 2005 versus a net loss per common share of $0.43 in the second quarter of 2004.

For the six months ended June 30, 2005, the Company's total operating revenue was $43.5 million compared to $61.7 million in the first six months of 2004. The Company had a loss from continuing operations of $16.2 million compared to a loss from continuing operations of $9.5 million for the six months ended June 30, 2004. The Company recorded a net loss of $16.2 million for the six months ended June 30, 2005 versus a net loss of $9.4 million for the six months ended June 30, 2004. The net loss per common share was $0.84 for the six month period in 2005 versus a net loss per common share of $0.49 in the first six months of 2004.

On May 19, 2005, the Company entered into an agreement to sell substantially all of the assets and to transfer certain liabilities of its telecommunications business to Acceris Management and Acquisition LLC, an arm's length Minnesota limited liability company and wholly-owned subsidiary of North Central Equity LLC. The transaction is expected to close in September 2005. Following the anticipated sale of its telecommunications assets, C2's technologies segment will constitute its primary business. The new name reflects this strategic change in the direction of the Company.

"The sale of our telecommunications business will allow C2 to focus on the growing Voice over Internet Protocol market" said Allan Silber, CEO of C2 Global Technologies Inc.

Please see the Company's Quarterly Report on Form 10-Q for the three months ended June 30, 2005 filed with the SEC for further information.

About C2 Global Technologies

C2 is a broad based communications company serving residential, small- and medium-sized business and large enterprise customers in the United States. A facilities-based carrier, it provides a range of products including local dial tone and 1+ domestic and international long distance voice services, as well as fully managed and fully integrated data and enhanced services. C2 offers its communications products and services both directly and through a network of independent agents, primarily via multi-level marketing and commercial agent programs. C2 also offers a proven network convergence solution for voice and data in Voice over Internet Protocol ("VoIP") communications technology and holds two foundational patents in the VoIP space. For further information, visit C2's website at www.c-2technologies.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
(unaudited)
(In thousands of dollars,
except share and per share amounts) June 30, December 31,
2005 2004
----------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 590 $ 458
Accounts receivable, less
allowance for doubtful accounts
of $2,098 and $2,163 at June 30,
2005 and December 31, 2004,
respectively 11,224 13,079
Other current assets 1,266 1,473
----------- ------------
Total current assets 13,080 15,010
Furniture, fixtures, equipment
and software, net 2,184 4,152
Other assets:
Intangible assets, net 1,051 1,404
Goodwill 1,120 1,120
Investment in preferred stock 1,100 1,100
Other assets 920 1,223
----------- ------------
Total assets $ 19,455 $ 24,009
----------- ------------
----------- ------------
LIABILITIES AND STOCKHOLDERS'
DEFICIT
Current liabilities:
Senior secured revolving credit
Facility $ 2,944 $ 4,725
Accounts payable and accrued
liabilities 22,919 27,309
Unearned revenue 745 959
Subordinated note payable 4,000 --
Subordinated notes payable to a
related party, net of
unamortized discount 61,437 --
Subordinated convertible note
payable, net of unamortized
discount 1,765 1,768
Current portion of notes payable
to third parties 202 160
Obligations under capital leases 487 1,441
----------- ------------
Total current liabilities 94,499 36,362
Subordinated convertible note
payable, net of unamortized
discount 1,861 2,952
Notes payable to third parties,
less current portion 537 645
Subordinated notes payable to a
related party, net of
unamortized discount -- 46,015
----------- ------------
Total liabilities 96,897 85,974
----------- ------------

Stockholders' deficit:
Preferred stock, $10.00 par
value, authorized 10,000,000
shares, issued and outstanding
618 at June 30, 2005 and
December 31, 2004, liquidation
preference of $618 at June 30,
2005 and December 31, 2004 6 6
Common stock, $0.01 par value,
authorized 300,000,000 shares,
issued and outstanding
19,237,135 at June 30, 2005 and
December 31, 2004 192 192
Additional paid-in capital 187,389 186,650
Accumulated deficit (265,029) (248,813)
----------- ------------
Total stockholders' deficit (77,442) (61,965)
----------- ------------
Total liabilities and
stockholders' deficit $ 19,455 $ 24,009
----------- ------------
----------- ------------


C2 GLOBAL TECHNOLOGIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
for the Three and Six Months Ended June 30, 2005 and 2004
(unaudited)

Three Months Six Months
Ended June 30, Ended June 30,
(In thousands, except per -----------------------------------
share amounts) 2005 2004 2005 2004
-----------------------------------
Revenues:
Telecommunications services $ 21,240 $ 26,419 $ 43,493 $ 61,142
Technology licensing and
development -- 90 -- 540
-----------------------------------
Total revenues 21,240 26,509 43,493 61,682
-----------------------------------
Operating costs and expenses:
Telecommunications network
expense (exclusive of
depreciation expense on
telecommunications network
assets of $886 and $1,294 for
the three months ended June 30,
2005 and 2004, respectively, and
$2,007 and $2,639 for the six
months ended June 30, 2005 and
2004, respectively, included in
depreciation and amortization
below) 13,366 15,477 27,096 32,112
Selling, general and
administrative 10,115 14,074 21,093 28,834
Provision for doubtful accounts 609 1,740 1,664 2,967
Research and development............ 151 106 301 106
Depreciation and amortization 1,072 1,653 2,380 3,357
-----------------------------------
Total operating costs and
expenses 25,313 33,050 52,534 67,376
-----------------------------------
Operating loss (4,073) (6,541) (9,041) (5,694)
-----------------------------------
Other income (expense):
Interest expense (4,040) (2,487) (7,207) (6,022)
Interest and other income 5 812 32 2,189
-----------------------------------
Total other income (expense) (4,035) (1,675) (7,175) (3,833)
-----------------------------------
Loss from continuing operations (8,108) (8,216) (16,216) (9,527)
Gain from discontinued operations
(net of $0 tax) - - - - -- 104
-----------------------------------
Net loss $(8,108) $(8,216)$(16,216) $(9,423)
-----------------------------------
-----------------------------------

Basic and diluted weighted
average shares outstanding....... 19,237 19,262 19,237 19,262

Net loss per common share
- basic and diluted:
Loss from continuing operations $ (0.42) $ (0.43) $ (0.84) $ (0.50)
Gain from discontinued
operations -- -- -- 0.01
-----------------------------------
Net loss per common share $ (0.42) $ (0.43) $ (0.84) $ (0.49)
-----------------------------------
-----------------------------------

The notes contained in our Quarterly Report on Form 10-Q are an
integral part of these condensed consolidated financial statements



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