Counsel Corporation
TSX : CXS

Counsel Corporation
Counsel RB Capital Inc.
OTC Bulletin Board : CRBN

Counsel RB Capital Inc.

April 01, 2011 08:15 ET

Counsel RB Capital Inc. Reports Fiscal Year 2010 Results

TORONTO, ONTARIO--(Marketwire - April 1, 2011) - Counsel RB Capital Inc. ("CRBCI" or the "Company") (OTCBB:CRBN), formerly C2 Global Technologies Inc., today reported its financial results for the year ended December 31, 2010. All amounts are stated in US dollars.

For the year ended December 31, 2010, the Company had net income of $4.8 million or $0.21 per common share, basic and diluted, compared to a net loss of $1.3 million or $0.06 per common share, basic and diluted, for the year ended December 31, 2009.

During 2010 the Company's revenue from continuing operations was $3.3 million, compared to $6.0 million for 2009. All of the revenue in both 2010 and 2009 was from the asset liquidation operations of the Company's subsidiary, Counsel RB Capital, LLC ("Counsel RB").

The following significant events occurred since the beginning of 2010:

  • In April 2010, Counsel RB, as part of a consortium, completed the sale of the former Aleris Aluminum manufacturing facility in Trois-Rivieres, Quebec for approximately $25 million. Counsel RB and its partners purchased the Aleris Aluminum assets in November 2009. Counsel RB's interest in the transaction yielded a gain of approximately $2.1 million after expenses, for Counsel RB.

  • In December 2010, the Company acquired the 25% non-controlling interest in Counsel RB, owned by Counsel RB's two CEOs, in exchange for 3,242,000 common shares of the Company. As a result, Counsel RB became a wholly-owned subsidiary. The acquisition price represented approximately 12.5%, post-issuance, of the Company's outstanding common shares. In January 2011, Jonathan Reich and Adam Reich were appointed Co-CEOs of the Company, and Allan Silber, the Company's Chairman and former CEO, became President.

  • In December 2010, the Company's Board of Directors, pursuant to the written consent of a majority of the Company's shareholders, approved a proposal to change the Company's name to Counsel RB Capital Inc. The change became effective January 19, 2011.

  • On March 15, 2011, the Company completed a private placement of 1,000,000 shares of common stock at an issue price of $1.83 per share. The shares were purchased by an institutional investor. The proceeds of the private placement will be used to fund growth opportunities.

"We are very pleased with the results of Counsel RB, which commenced operations in the second quarter of 2009", said Allan Silber, Chairman and President of CRBCI. "Counsel RB has become a leader in capital assets solutions, which involve finding, acquiring and monetizing distressed and surplus assets".

Please see the Company's Annual Report on Form 10-K for the year ended December 31, 2010, filed with the SEC on March 31, 2011, for further information.

About Counsel RB Capital Inc.

The Company operates in two business segments: asset liquidation and patent licensing. Its asset liquidation business acquires and disposes of distressed and surplus assets throughout the United States and Canada, including industrial machinery and equipment, real estate, inventories, accounts receivable and distressed debt. In addition to purchasing various types of assets, the Company also arranges traditional asset disposition services such as on-site and webcast auctions, liquidations and negotiated sales. The Company's patent licensing business develops and licenses its patents, which include two foundational patents in VoIP technology. In addition, the Company owns approximately 5% of Polaroid Corporation. For further information, please visit our website at www.counselrb.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.

COUNSEL RB CAPITAL INC. AND SUBSIDIARIES  
(FORMERLY C2 GLOBAL TECHNOLOGIES INC.)  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(audited)  
       
   
   
   
(In thousands, except share and per share amounts) December 31, 2010   December 31, 2009  
   
ASSETS            
             
Current assets:            
  Cash $ 2,608   $ 93  
  Amounts receivable (net of allowance for doubtful accounts of $168; 2009 - $0)   203     1,653  
  Receivable from a related party   392      
  Deposits   771     300  
  Inventory – equipment   2,594     442  
  Other current assets   63     110  
  Deferred income tax assets   2,228     729  
    Total current assets   8,859     3,327  
Other assets:            
  Inventory – real estate   1,573     1,396  
  Asset liquidation investments   3,548     3,943  
  Investments   2,706     2,788  
  Goodwill       173  
    Total assets $ 16,686   $ 11,627  
             
LIABILITIES AND EQUITY            
             
Current liabilities:            
  Accounts payable and accrued liabilities $ 2,555   $ 1,457  
  Income taxes payable   198     26  
  Debt payable to third parties   4,485     4,626  
  Debt payable to a related party       1,564  
    Total liabilities   7,238     7,673  
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, 2010 and 2009; liquidation preference of $592 at December 31, 2010 and 2009   6     6  
  Common stock, $0.01 par value, authorized 300,000,000 shares; issued and outstanding 25,960,080 shares at December 31, 2010 and 22,718,080 shares at December 31, 2009   259     227  
  Additional paid-in capital   275,641     274,706  
  Accumulated deficit   (266,458 )   (271,287 )
  Equity   9,448     3,652  
  Non-controlling interest in subsidiary       302  
    Total equity   9,448     3,954  
    Total liabilities and equity $ 16,686   $ 11,627  

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

COUNSEL RB CAPITAL INC. AND SUBSIDIARIES
(FORMERLY C2 GLOBAL TECHNOLOGIES INC.)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(audited)
 
  Year Ended December 31,  
(In thousands, except per share amounts) 2010   2009  
   
Revenue:            
  Asset liquidation $ 3,266   $ 5,991  
Operating costs and expenses:            
  Asset liquidation   2,112     4,138  
  Patent licensing   128     29  
  Selling, general and administrative   3,232     2,657  
    Total operating costs and expenses   5,472     6,824  
    (2,206 )   (833 )
Earnings of equity accounted asset liquidation investments   7,586     64  
Operating income (loss)   5,380     (769 )
Other income (expense):            
  Other income (expense)   (5 )   (88 )
  Goodwill impairment   (173 )    
  Interest expense   (336 )   (325 )
    Total other income (expense)   (514 )   (413 )
Income (loss) from continuing operations before the undernoted   4,866     (1,182 )
Income tax expense (recovery)   (1,318 )   269  
Earnings of other equity accounted investments (net of $0 tax)   30     252  
Net income (loss)   6,214     (1,199 )
Net (income) loss attributable to non-controlling interest   (1,385 )   (65 )
Net income (loss) attributable to controlling interest $ 4,829   $ (1,264 )
Weighted average common shares outstanding   22,887     22,723  
Weighted average preferred shares outstanding   1     1  
Net income (loss) per share:            
  Common shares $ 0.21   $ (0.06 )
  Preferred shares $ 8.43   $ N/A  

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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