Florida
|
59-2291344
|
(State or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification No.)
|
700 – 1 Toronto St., Toronto, Ontario, Canada
|
M5C 2V6
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
PAGE
|
||||
PART I
|
||||
Item 1.
|
Business.
|
3
|
||
Item 1A.
|
Risk Factors.
|
8
|
||
Item 1B.
|
Unresolved Staff Comments.
|
10
|
||
Item 2.
|
Properties.
|
10
|
||
Item 3.
|
Legal Proceedings.
|
10
|
||
Item 4.
|
[Removed and Reserved].
|
10
|
||
PART II
|
||||
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
11
|
||
Item 6.
|
Selected Financial Data.
|
14
|
||
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
15
|
||
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
23
|
||
Item 8.
|
Financial Statements and Supplementary Data.
|
23
|
||
Item 9.
|
Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.
|
23
|
||
Item 9A(T).
|
Controls and Procedures.
|
23
|
||
Item 9B.
|
Other Information.
|
24
|
||
PART III
|
||||
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
25
|
||
Item 11.
|
Executive Compensation.
|
29
|
||
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
39
|
||
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
40
|
||
Item 14.
|
Principal Accountant Fees and Services.
|
41
|
||
PART IV
|
||||
Item 15.
|
Exhibits and Financial Statement Schedules.
|
43
|
Type
|
Title
|
Numbe
r
|
Status
|
|||
VoIP Architecture
|
Computer Network/Internet
|
U.S. No. 6,243,373
1
|
Issued: June 5, 2001
|
|||
Telephone System
(“VoIP Patent”)
|
Expires: November 1, 2015
|
|||||
Australia No. 716096
|
Issued: June 1, 2000
|
|||||
Expires: October 29, 2016
|
||||||
People’s Republic of
|
Issued: December 14, 2005
|
|||||
China No. ZL96199457.6
|
Expires: October 29, 2016
|
|||||
Canada No. 2,238,867
|
Issued: October 18, 2005
|
|||||
Expires: October 29, 2016
|
||||||
Hong Kong
|
Issued: August 11, 2006
|
|||||
No. HK1018372
|
Expires: October 29, 2016
|
|||||
Europe No. 0873637
|
Granted March 21, 2007
2
|
|||||
Voice Internet Transmission
|
U.S. No. 6,438,124
|
Issued: August 20, 2002
|
||||
System
(“C2 Patent”)
|
Expires: July 22, 2018
|
|||||
People’s Republic of
|
Issued: May 21, 2004
|
|||||
China No. ZL97192954.8
|
Expires: February 5, 2017
|
|||||
Canada No. 2,245,815
|
Issued: October 10, 2006
|
|||||
Expires: February 5, 2017
|
||||||
South Korea No. 847335
|
Issued: July 14, 2008
|
|||||
Expires: February 5, 2017
|
||||||
South Korea No. 892950
|
Issued: April 3, 2009
|
|||||
Expires: February 5, 2017
|
||||||
South Korea No. 923483
|
Issued: October 19, 2009
|
|||||
Expires: February 5, 2017
|
||||||
Private IP Communication
|
U.S. No. 7,215,663
|
Issued: May 8, 2007
|
||||
Network Architecture
|
Expires: June 12, 2017
|
|||||
Conferencing
|
Delay Synchronization in
|
U.S. No. 5,754,534
|
Issued: May 19, 1998
|
|||
Compressed Audio Systems
|
Expires: May 6, 2016
|
|||||
Volume Control Arrangement
|
U.S. No. 5,898,675
|
Issued: April 27, 1999
|
||||
for Compressed Information
Signal Delays
|
Expires: April 29, 2016
|
Quarter Ended
|
High
|
Low
|
||||||
March 31, 2009
|
$ | 0.50 | $ | 0.14 | ||||
June 30, 2009
|
0.30 | 0.15 | ||||||
September 30, 2009
|
0.45 | 0.08 | ||||||
December 31, 2009
|
0.45 | 0.07 | ||||||
March 31, 2010
|
$ | 0.16 | $ | 0.08 | ||||
June 30, 2010
|
1.18 | 0.06 | ||||||
September 30, 2010
|
0.85 | 0.10 | ||||||
December 31, 2010
|
0.26 | 0.10 |
Plan Category (1)
|
Number of Securities to be
issued upon exercise of
outstanding options
|
Weighted-average
exercise price of
outstanding options
|
Number of
securities
remaining available
for future issuance
under equity
compensation plans
(excluding
securities reflected
in column (a))
|
|||||||||
(a)
|
(b)
|
(c)
|
||||||||||
Equity compensation plans approved by security holders:
|
||||||||||||
2010 Non-Qualified Stock Option Plan
|
— | — | 1,250,000 | |||||||||
2003 Stock Option and Appreciation Rights Plan
|
493,250 | $ | 0.77 | 1,506,750 | ||||||||
1997 Recruitment Stock Option Plan
|
234,163 | 0.87 | 135,837 | |||||||||
1995 Directors Stock Option and Appreciation Rights Plan
|
— | — | 12,500 | |||||||||
1995 Employee Stock Option and Appreciation Rights Plan
|
— | — | 20,000 | |||||||||
Equity compensation plans not approved by security holders:
|
||||||||||||
Issuance of non-qualified options to employees and outside consultants
|
833 | 78.00 | — | |||||||||
Total
|
728,246 | $ | 0.89 | 2,925,087 |
Total Return Analysis
|
||||||||||||||||||||||||
12/31/05
|
12/31/06
|
12/31/07
|
12/31/08
|
12/31/09
|
12/31/10
|
|||||||||||||||||||
Counsel RB Capital Inc.
|
$ | 100.00 | $ | 65.57 | $ | 50.82 | $ | 22.95 | $ | 24.59 | $ | 19.67 | ||||||||||||
Russell 2000 Index
|
$ | 100.00 | $ | 118.37 | $ | 116.51 | $ | 77.15 | $ | 98.11 | $ | 124.46 | ||||||||||||
Current Peer Group
|
$ | 100.00 | $ | 143.86 | $ | 196.27 | $ | 139.06 | $ | 159.24 | $ | 190.19 | ||||||||||||
Former Peer Group
|
$ | 100.00 | $ | 144.91 | $ | 198.15 | $ | 139.98 | $ | 161.73 | $ | 200.78 |
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
Statement of Operations Data :
|
||||||||||||||||||||
Asset liquidation revenue
|
$ | 3,266 | $ | 5,991 | $ | — | $ | — | $ | — | ||||||||||
Patent licensing revenue
|
— | — | 17,625 | — | — | |||||||||||||||
Earnings of equity accounted asset liquidation investments
|
7,586 | 64 | — | — | — | |||||||||||||||
Operating income (loss)
|
5,380 | (769 | ) | 5,603 | (1,236 | ) | (1,301 | ) | ||||||||||||
Other income (expense)
|
(5 | ) | (88 | ) | 442 | (213 | ) | 155 | ||||||||||||
Goodwill impairment
|
(173 | ) | — | — | — | — | ||||||||||||||
Interest expense
|
(336 | ) | (325 | ) | (43 | ) | (196 | ) | (10,900 | ) | ||||||||||
Income tax expense (recovery)
|
(1,318 | ) | 269 | 125 | (1,000 | ) | — | |||||||||||||
Earnings (loss) from equity accounted investments
|
30 | 252 | (38 | ) | 6 | — | ||||||||||||||
Income (loss) from continuing operations
|
6,214 | (1,199 | ) | 5,839 | (639 | ) | (12,046 | ) | ||||||||||||
Income (loss) from discontinued operations
|
— | — | (12 | ) | (6 | ) | 4,370 | |||||||||||||
Net (income) loss attributable to non-controlling interest
|
(1,385 | ) | (65 | ) | — | — | — | |||||||||||||
Net income (loss) attributable to controlling interest
|
4,829 | (1,264 | ) | 5,827 | (645 | ) | (7,676 | ) | ||||||||||||
Earnings (loss) from continuing operations per common share – basic and diluted:
|
$ | 0.21 | $ | (0.06 | ) | $ | 0.25 | $ | (0.03 | ) | $ | (0.63 | ) | |||||||
Balance Sheet Data:
|
||||||||||||||||||||
Total assets
|
$ | 16,686 | $ | 11,627 | $ | 5,443 | $ | 1,796 | $ | 1,386 | ||||||||||
Total current liabilities
|
$ | 7,238 | $ | 7,673 | $ | 472 | $ | 2,737 | $ | 1,855 | ||||||||||
Total long-term obligations
|
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Stockholders’ equity (deficit)
|
$ | 9,448 | $ | 3,954 | $ | 4,971 | $ | (941 | ) | $ | (469 | ) |
·
|
At December 31, 2010 the Company had stockholders’ equity of $9,448, as compared to $3,954 at December 31, 2009.
|
·
|
At December 31, 2010 the Company was 79.5% owned by Counsel. The Co-CEOs of Counsel RB each owned 6.25% of the Company, and the remaining 8.0% was owned by public stockholders. On March 15, 2011, as discussed in Note 16 of the audited consolidated financial statements, the Company issued one million common shares through a private placement, representing 3.7% of the outstanding common shares. Counsel’s ownership thereby decreased to 76.6%, that of the Co-CEOs to 6.0% each, and that of the remaining public stockholders to 7.7%.
|
·
|
As discussed in Note 2 of the audited consolidated financial statements, Counsel RB was originally owned 75% by the Company and 25% by Counsel RB’s Co-CEOs, and at November 30, 2010 the Company acquired the 25% interest in Counsel RB in exchange for 3,242,000 common shares of CRBCI. The net result of this transaction was a transfer of $921 from the non-controlling interest to the Company, $32 of which was allocated to common shares and $889 of which was allocated to additional paid-in capital. The remaining balance of the non-controlling interest was distributed to Counsel RB’s Co-CEOs.
|
·
|
Beginning in 2001, Counsel invested over $100,000 in CRBCI to fund the development of CRBCI’s technology and its Telecommunications business, and at December 29, 2006 CRBCI owed $83,582 to Counsel, including accrued and unpaid interest. On December 30, 2006 Counsel converted $3,386 of this debt into 3,847,475 common shares of CRBCI, and forgave the balance of $80,196.
|
Payment due by period
|
||||||||||||||||||||
Contractual obligations:
|
Total
|
Less than 1
year
|
1-3
years
|
3-5
years
|
More than
5 years
|
|||||||||||||||
Revolving Credit Facility
|
$ | 4,710 | $ | 4,710 | $ | — | $ | — | $ | — | ||||||||||
Operating leases
|
751 | 152 | 310 | 289 | — | |||||||||||||||
Total
|
$ | 5,461 | $ | 4,862 | $ | 310 | $ | 289 | $ | — |
2010
|
2009
|
2008
|
||||||||||
Revenue:
|
||||||||||||
Asset liquidation
|
$ | 3,266 | $ | 5,991 | $ | — | ||||||
Patent licensing
|
— | — | 17,625 | |||||||||
Total revenue
|
3,266 | 5,991 | 17,625 | |||||||||
Operating costs and expenses:
|
||||||||||||
Asset liquidation
|
2,112 | 4,138 | — | |||||||||
Patent licensing and maintenance
|
128 | 29 | 10,729 | |||||||||
Selling, general and administrative
|
3,232 | 2,657 | 1,273 | |||||||||
Depreciation and amortization
|
— | — | 20 | |||||||||
Total operating costs and expenses
|
5,472 | 6,824 | 12,022 | |||||||||
(2,206 | ) | (833 | ) | 5,603 | ||||||||
Earnings of equity accounted asset liquidation investments
|
7,586 | 64 | — | |||||||||
Operating income (loss)
|
5,380 | (769 | ) | 5,603 | ||||||||
Other income (expenses):
|
||||||||||||
Other income (expense)
|
(5 | ) | (88 | ) | 442 | |||||||
Goodwill impairment
|
(173 | ) | — | — | ||||||||
Interest expense – third party
|
(272 | ) | (217 | ) | — | |||||||
Interest expense – related party
|
(64 | ) | (108 | ) | (43 | ) | ||||||
Total other income (expense)
|
(514 | ) | (413 | ) | 399 | |||||||
Income (loss) from continuing operations before the undernoted
|
4,866 | (1,182 | ) | 6,002 | ||||||||
Income tax expense
|
(1,318 | ) | 269 | 125 | ||||||||
Earnings (loss) of equity accounted investments (net of $0 tax)
|
30 | 252 | (38 | ) | ||||||||
Income (loss) from continuing operations
|
6,214 | (1,199 | ) | 5,839 | ||||||||
Loss from discontinued operations
|
— | — | (12 | ) | ||||||||
Net income (loss)
|
6,214 | (1,199 | ) | 5,827 | ||||||||
Net income attributable to non-controlling interest
|
(1,385 | ) | (65 | ) | — | |||||||
Net income (loss) attributable to controlling interest
|
$ | 4,829 | $ | (1,264 | ) | $ | 5,827 |
·
|
Compensation expense in 2010 was $1,741 compared to $1,163 in 2009. In 2010, compensation paid to Counsel RB employees was $1,281, as compared to $954 paid in 2009. The increase was due to two factors. The first is that compensation paid in 2010 was for the entire year, whereas for 2009 it was paid for only 10 months, as Counsel RB was founded in 2009. The second is that during 2010, as Counsel RB’s operations have continued to expand, the number of direct employees has increased from four to seven. In both 2010 and 2009 the salary earned by the CEO of CRBCI was $138. However, in 2010 a bonus of $275 was awarded to the CEO of CRBCI; there was no corresponding expense in 2009. Stock-based compensation expense decreased by $25, from $71 in 2009 to $46 in 2010.
|
·
|
Legal expenses in 2010 were $143, a decrease of $393 compared to $536 in 2009. In 2010, $80 of these expenses were related to Counsel RB’s operations, and the majority of the remaining expense related to the Company’s acquisition of Counsel RB’s non-controlling interest. In 2009, Counsel RB incurred $85 of legal expense and the remaining expense was primarily due to costs incurred with respect to the formation of proposed investment fund vehicles.
|
·
|
Accounting and tax consulting expenses in 2010 were $138 compared to $97 in 2009.
|
·
|
Fees paid to the members of our Board of Directors were $136 in 2010 compared to $126 in 2009, due to more meetings held during 2010.
|
·
|
Consulting expense was $105 in 2010 as compared to $82 in 2009, and related solely to the operations of Counsel RB.
|
·
|
Management fee expense charged by our majority stockholder, Counsel, remained unchanged at $360 in both 2010 and 2009. See Item 13 of this Report for details regarding these management fees.
|
·
|
Directors and officers liability insurance expense was $51 in 2010 as compared to $91 in 2009. The decrease reflects a decrease in the premium.
|
·
|
Office rent was $100 in 2010 as compared to $64 in 2009, and related solely to the operations of Counsel RB. The increase is due to the growth of the business and the requirement for additional space as the number of employees has increased.
|
·
|
Travel and entertainment expense was $75 in 2010 as compared to $30 in 2009, and in both years was primarily related to the operations of Counsel RB. The increase is due to the growth of Counsel RB’s business during 2010.
|
·
|
General insurance expense was $44 in 2010 as compared to $20 in 2009. The increase is due to the growth of Counsel RB’s operations.
|
·
|
During 2010, the Company recorded a provision of $168 on accounts and notes receivable related to Counsel RB’s operations. There were no similar transactions during 2009.
|
·
|
Other expense was $5 in 2010, as compared to other expense of $88 in 2009. In 2010, the Company realized a gain of $332 on the fourth quarter sale of its remaining investment in Buddy Media. The other significant source of other income was a $153 settlement from legacy litigation involving a joint venture in which Counsel RB had invested. Counsel RB also earned interest income of $25. These items were partially offset by a $123 writedown of Counsel RB’s real estate inventory, and $392 of net operating expenses relating to properties held for sale by Counsel RB. In 2009 the expense consisted primarily of a write down of $113 taken against Counsel RB inventory, of which $24 related to equipment and $89 to real estate. These losses were partially offset by a gain of $21 on the Company’s sale of a portion of its investment in Buddy Media and $4 of bank interest.
|
·
|
Third party interest expense was $272 in 2010 as compared to $217 in 2009, all of which related to the third party debt owed by Counsel RB. In 2010, $80 of this expense represents the amortization of deferred financing costs, as compared to $112 in 2009.
|
·
|
Related party interest expense was $64 in 2010, as compared to $108 in 2009. During 2010 the Company repaid all of the 2009 and 2010 advances from Counsel, and at December 31, 2010 the Company had a receivable from Counsel of $392.
|
·
|
In 2010, the Company recorded $30 of earnings from its equity accounted investments, as compared to earnings of $252 in 2009. In 2010, the earnings consisted of $14 from Polaroid and $16 from Knight’s Bridge GP. In 2009, the comparable amounts were earnings of $246 from Polaroid and $6 from Knight’s Bridge GP.
|
·
|
Compensation expense in 2009 was $1,163 compared to $361 in 2008. The increase was primarily due to $954 of compensation paid to Counsel RB employees, for which there was no corresponding expense in 2008. The salary earned by the CEO of CRBCI remained unchanged at $138. There was no bonus paid to the CEO of CRBCI in 2009, compared to $138 paid in 2008. Stock-based compensation expense decreased by $14, from $85 in 2008 to $71 in 2009.
|
·
|
Legal expenses in 2009 were $536, an increase of $448 compared to $88 in 2008. The increase was primarily due to costs incurred with respect to the formation of proposed investment fund vehicles. As well, Counsel RB incurred $85 of legal expense during 2009.
|
·
|
Accounting and tax consulting expenses in 2009 were $97 compared to $122 in 2008.
|
·
|
Fees paid to the members of our Board of Directors remained unchanged at $126 in both 2009 and 2008.
|
·
|
Consulting expense was $82 in 2009, and related solely to the operations of Counsel RB. There was no comparable expense in 2008.
|
·
|
Management fee expense charged by our majority stockholder, Counsel, remained unchanged at $360 in both 2009 and 2008. See Item 13 of this Report for details regarding these management fees.
|
·
|
Directors and officers liability insurance expense was $91 in 2009 as compared to $150 in 2008. The decrease reflects a decrease in the premium, which became effective in June 2009.
|
·
|
Office rent was $64 in 2009 and related solely to the operations of Counsel RB. There was no comparable expense in 2008.
|
·
|
Other expense was $88 in 2009, as compared to other income of $442 in 2008. In 2009 this consisted primarily of a write down of $113 taken against Counsel RB inventory, of which $24 related to equipment and $89 to real estate. These losses were partially offset by a gain of $21 on the Company’s sale of a portion of its investment in Buddy Media and $4 of bank interest. In 2008 this consisted of a $425 gain on the sale of the Company’s investment in LIMOS.com, $15 of interest income and $2 received as a reduction of prior years’ insurance premiums.
|
·
|
Third party interest expense was $217 in 2009, all of which related to the third party debt owed by Counsel RB. $112 of this expense represents the amortization of deferred financing costs. There was no corresponding expense in 2008, as the Company had no third party debt outstanding during the year.
|
·
|
Related party interest expense was $108 in 2009, as compared to $43 in 2008. The Company began receiving advances from its parent, Counsel, in the second quarter of 2009, and at December 31, 2009, total principal and interest outstanding totaled $1,564. In the first quarter of 2008, the Company accrued $43 of interest on the related party loan balance that was outstanding at December 31, 2007. This debt was repaid in March 2008 and therefore the Company incurred no interest expense subsequent to that date.
|
·
|
In 2009, the Company recorded $252 of earnings from its equity accounted investments, as compared to recording a loss of $38 in 2008. In 2009, the earnings consisted of $246 from Polaroid and $6 from Knight’s Bridge GP. In 2008, the Company recorded a loss of $38, consisting of a $43 loss from LIMOS.com, partially offset by $5 earnings from Knight’s Bridge GP.
|
Name
|
Age (1)
|
Title
|
||
Allan C. Silber
|
62
|
Chairman of the Board and President
|
||
Hal B. Heaton
|
60
|
Director (2), (3), (4)
|
||
Henry Y.L. Toh
|
53
|
Director (2), (3), (4)
|
||
Samuel L. Shimer
|
47
|
Director (2)
|
||
David L. Turock
|
53
|
Director (2)
|
||
Jonathan S. Reich
|
47
|
Co-Chief Executive Officer
|
||
Adam M. Reich
|
44
|
Co-Chief Executive Officer
|
||
Stephen A. Weintraub
|
63
|
Executive Vice President, Corporate Secretary and Chief Financial Officer
|
|
(1)
|
As of December 31, 2010.
|
|
(2)
|
Independent Director
|
|
(3)
|
Member of the Audit Committee
|
|
(4)
|
Member of the Compensation Committee
|
|
•
|
our compensation philosophy and program;
|
|
•
|
the objectives of our compensation program;
|
|
•
|
what our compensation program is designed to reward;
|
|
•
|
each element of compensation;
|
|
•
|
why we choose to pay each element;
|
|
•
|
how we determine the amount for each element; and
|
|
•
|
how each compensation element and our decision regarding that element fit into our overall compensation objectives and affect decisions regarding other elements, including the relationship between our compensation objectives and our overall risk management.
|
•
|
Our executive compensation program should strengthen the relationship between compensation, both cash and equity-based, a
nd performance by emphasizing variable, at-risk earnings that are dependent upon the successful achievement of specified corporate, business unit and individual performance goals.
|
•
|
A portion of each executive’s total compensation should be comprised of long-term, at-risk compensation to focus m
anagement on the long-term interests of shareholders.
|
•
|
An appropriately balanced mix of at-risk incentive cash and equity-based compensation aligns the interests of our executives w
ith that of our shareholders. The equity-based component promotes a continuing focus on building profitability and shareowner value.
|
•
|
Total compensation should enhance our ability to attract, retain, motivate and develop knowledgeable and experienced e
xecutives upon whom, in large part, our successful operation and management depends.
|
•
|
Total compensation should encourage our executives to ensure that the risks involved in any business decision align that executive’s potential personal return with maximal return to shareholders.
|
Name and Principal Position
|
Year
|
Salary
|
Bonus
|
Option
Awards
1
|
All Other
Compensation
2
|
Total
|
||||||||||||||||
Allan Silber
|
2010
|
$ | 137,500 | $ | 275,000 | $ | 19,581 | $ | — | $ | 432,081 | |||||||||||
Chairman of the Board and Chief
|
2009
|
137,500 | — | 33,563 | — | 171,063 | ||||||||||||||||
Executive Officer
|
2008
|
137,500 | 137,500 | 33,563 | — | 308,563 | ||||||||||||||||
Stephen Weintraub
|
2010
|
— | — | 7,220 | — | 7,220 | ||||||||||||||||
Executive Vice President, Chief
|
2009
|
— | — | 12,375 | — | 12,375 | ||||||||||||||||
Financial Officer and Corporate Secretary
|
2008
|
— | — | 12,375 | — | 12,375 | ||||||||||||||||
Jonathan Reich
|
2010
|
450,000 | — | — | 31,906 | 481,906 | ||||||||||||||||
Co-CEO, Counsel RB
|
2009
|
393,750 | — | — | 27,068 | 420,818 | ||||||||||||||||
2008
|
N/A | N/A | N/A | N/A | N/A | |||||||||||||||||
Adam Reich
|
2010
|
450,000 | — | — | 31,524 | 481,524 | ||||||||||||||||
Co-CEO, Counsel RB
|
2009
|
393,750 | — | — | 27,081 | 420,831 | ||||||||||||||||
2008
|
N/A | N/A | N/A | N/A | N/A |
Name
|
Number of
Securities
Underlying
Unexercised
Options:
Exercisable
|
Option
Exercise
Price($/Sh)
|
Option
Expiration
Date
|
|||||||
Allan Silber
|
225,000 | $ | 0.66 |
August 1, 2013
|
||||||
Allan Silber
|
75,000 | 1.11 |
August 1, 2013
|
|||||||
Stephen Weintraub
|
75,000 | 1.01 |
August 1, 2013
|
|||||||
1
The options vest 25% annually beginning on the first anniversary of the grant date, which was August 1, 2006 for all options reported in this table.
|
Name
|
Fees Earned or Paid in Cash
|
Option Awards
1
|
Total
|
|||||||||
Henry Y.L. Toh
|
$ | 46,000 | $ | 4,074 | $ | 50,074 | ||||||
Hal B. Heaton
|
38,000 | 4,074 | 42,074 | |||||||||
Samuel L. Shimer
|
26,000 | 4,074 | 30,074 | |||||||||
David L. Turock
|
26,000 | 2,717 | 28,717 | |||||||||
1
The options vest 25% annually beginning on the first anniversary of the grant date. The amount reported in this column relates to compensation expense associated with options issued in each year from 2006 to 2010. The table below provides information regarding the current year compensation expense and grant date fair value of each option award underlying the reported 2010 compensation expense.
|
DETAIL OF DIRECTOR OPTION AWARDS EXPENSE
|
||||||||||||||
Name
|
Grant Date
|
Number of
Options
Awarded
|
Grant Date Fair
Value of Option
Award
|
2010 Expense
|
||||||||||
Henry Y. L. Toh
|
April 3, 2006
|
10,000 | $ | 3,300 | $ | 207 | ||||||||
April 2, 2007
|
10,000 | 4,600 | 1,150 | |||||||||||
March 31, 2008
|
10,000 | 8,700 | 2,175 | |||||||||||
March 31, 2009
|
10,000 | 1,500 | 375 | |||||||||||
March 31, 2010
|
10,000 | 800 | 167 | |||||||||||
$ | 4,074 | |||||||||||||
Hal B. Heaton
|
April 3, 2006
|
10,000 | $ | 3,300 | $ | 207 | ||||||||
April 2, 2007
|
10,000 | 4,600 | 1,150 | |||||||||||
March 31, 2008
|
10,000 | 8,700 | 2,175 | |||||||||||
March 31, 2009
|
10,000 | 1,500 | 375 | |||||||||||
March 31, 2010
|
10,000 | 800 | 167 | |||||||||||
$ | 4,074 | |||||||||||||
Samuel L. Shimer
|
April 3, 2006
|
10,000 | $ | 3,300 | $ | 207 | ||||||||
April 2, 2007
|
10,000 | 4,600 | 1,150 | |||||||||||
March 31, 2008
|
10,000 | 8,700 | 2,175 | |||||||||||
March 31, 2009
|
10,000 | 1,500 | 375 | |||||||||||
March 31, 2010
|
10,000 | 800 | 167 | |||||||||||
$ | 4,074 | |||||||||||||
David L. Turock
|
March 31, 2008
|
10,000 | 8,700 | $ | 2,175 | |||||||||
March 31, 2009
|
10,000 | 1,500 | 375 | |||||||||||
March 31, 2010
|
10,000 | 800 | 167 | |||||||||||
$ | 2,717 |
·
|
as a member of the compensation committee of another entity which has had an executive officer who has served on our compensation committee;
|
·
|
as a director of another entity which has had an executive officer who has served on our compensation committee; or
|
·
|
as a member of the compensation committee of another entity which has had an executive officer who has served as one of our directors.
|
/s/ Hal. B. Heaton
|
Hal B. Heaton, Chairman
|
/s/ Henry Y.L. Toh
|
Henry Y. L. Toh
|
Name and Address of
Beneficial Owner (1)
|
Number of Shares
Beneficially Owned
(2)
|
Percentage
of Common Stock
Beneficially Owned
|
||||||
Allan C. Silber
|
300,000 | (3) | 1 | % | ||||
Adam M. Reich
|
1,621,000 | 5.9 | % | |||||
Jonathan S. Reich
|
1,621,000 | 5.9 | % | |||||
Hal B. Heaton
|
58,500 | (4) | * | % | ||||
Henry Y.L. Toh
|
57,698 | (4) | * | % | ||||
Samuel L. Shimer
|
55,000 | (5) | * | % | ||||
David L. Turock
|
15,000 | (4) | * | % | ||||
Stephen A. Weintraub
|
75,000 | (6) | * | % | ||||
Counsel Corporation and subsidiaries
1 Toronto Street Suite 700
Toronto, Ontario M5C 2V6
|
20,644,481 | 77 | % | |||||
All Executive Officers and Directors as a Group (6 people)
|
3,803,198 | 14 | % |
|
*
|
Indicates less than one percent
|
(1)
|
Unless otherwise noted, all listed shares of common stock are owned of record by each person or entity named as beneficial owner and that person or entity has sole voting and dispositive power with respect to the shares of common stock owned by each of them. All addresses are c/o Counsel RB Capital Inc. unless otherwise indicated.
|
(2)
|
As to each person or entity named as beneficial owners, that person’s or entity’s percentage of ownership is determined based on the assumption that any options or convertible securities held by such person or entity which are exercisable or convertible within 60 days have been exercised or converted, as the case may be.
|
(3)
|
Represents shares of common stock issuable pursuant to options. Mr. Silber is Chairman, Chief Executive Officer and President of Counsel, and a beneficial owner of approximately 7,855,776 shares or 9.9% of the outstanding common stock of Counsel. Mr. Silber disclaims beneficial ownership of the shares of CRBCI’s common stock beneficially owned by Counsel.
|
(4)
|
Represents shares of common stock issuable pursuant to options.
|
|
(5)
|
Represents shares of common stock issuable pursuant to options. Mr. Shimer is a beneficial owner of 819,011 shares in Counsel, which represents a 1.1% beneficial ownership of Counsel. Mr. Shimer disclaims beneficial ownership of the shares of CRBCI’s common stock beneficially owned by Counsel.
|
|
(6)
|
Represents shares of common stock issuable pursuant to options. Mr. Weintraub is Executive Vice President, Secretary and Chief Financial Officer of Counsel and a beneficial owner of 516,901 shares in Counsel, which represents less than 1% beneficial ownership of Counsel. Mr. Weintraub disclaims beneficial ownership of the shares of CRBCI’s common stock beneficially owned by Counsel.
|
Year Ended December 31,
|
||||||||
|
2010
|
2009
|
||||||
Audit fees
|
$ | 108 | $ | 88 | ||||
Audit-related fees
|
— | — | ||||||
Tax fees
|
— | — | ||||||
All other fees
|
— | — | ||||||
Total
|
$ | 108 | $ | 88 |
|
(a)
|
The following financial statements and those financial statement schedules required by Item 8 hereof are filed as part of this Report:
|
|
(b)
|
The following exhibits are filed as part of this Report:
|
Exhibit Number
|
Title of Exhibit
|
|
3.1(i)
|
Amended and Restated Articles of Incorporation. (1)
|
|
|
||
3.2(ii)
|
Bylaws as amended (2)
|
|
3.2(iii)
|
Articles of Amendment to the Amended and Restated Articles of Incorporation (11)
|
|
10.1*
|
1997 Recruitment Stock Option Plan. (3)
|
|
|
||
10.2*
|
2001 Stock Option and Appreciation Rights Plan. (4)
|
|
|
||
10.2.1*
|
2003 Stock Option and Appreciation Rights Plan. (5)
|
|
10.3*
|
2010 Non-Qualified Stock Option Plan (12)
|
|
10.4*
|
Counsel Management Agreement. (7)
|
|
10.5
|
Stipulation of Dismissal with Prejudice dated as of March 12, 2009. (8)
|
|
10.6
|
LLC Membership Interest Purchase Agreement among Greystone & Co. Holdings LLC and Counsel RB Capital LLC, dated as of May 28, 2009. (9)
|
|
10.7
|
Promissory Note between Counsel RB Capital LLC and Greystone & Co. Holdings LLC, dated as of May 28, 2009. (9)
|
|
10.8
|
Loan and Security Agreement between Israel Discount Bank of New York (as Agent) and Counsel RB Capital LLC, dated as of June 2, 2009. (9)
|
|
10.9
|
Sixth Amendment to Loan Agreement between C2 Global Technologies Inc. and Counsel Corporation dated January 26, 2004, dated as of May 5, 2009. (9)
|
Exhibit Number
|
Title of Exhibit
|
|
10.10
|
Promissory Note for $2,590,989.63 dated May 5, 2009 between C2 Global Technologies Inc. and Counsel Corporation. (9)
|
|
10.11
|
Promissory Note for $90,000.00 dated June 30, 2009 between C2 Global Technologies Inc. and Counsel Corporation. (9)
|
|
10.12
|
Promissory Note for $128,712.86 dated June 30, 2009 between C2 Global Technologies Inc. and Counsel Corporation. (9)
|
|
10.13
|
Promissory Note for $200,000.00 dated September 30, 2009 between C2 Global Technologies Inc. and Counsel Corporation. (10)
|
|
10.14
|
Promissory Note for $90,000.00 dated September 30, 2009 between C2 Global Technologies Inc. and Counsel Corporation. (10)
|
|
10.15
|
Promissory Note for $87,806.64 dated September 30, 2009 between C2 Global Technologies Inc. and Counsel Corporation. (10)
|
|
10.16
|
Promissory Note for $320,000.00 dated December 31, 2009 between C2 Global Technologies Inc. and Counsel Corporation. (13)
|
|
10.17
|
Promissory Note for $90,000.00 dated December 31, 2009 between C2 Global Technologies Inc. and Counsel Corporation. (13)
|
|
10.18
|
Promissory Note for $129,950.17 dated December 31, 2009 between C2 Global Technologies Inc. and Counsel Corporation. (13)
|
|
10.19
|
Promissory Note for $620,540.88 dated March 31, 2010 between C2 Global Technologies Inc. and Counsel Corporation. (14)
|
|
10.20
|
Promissory Note for $90,000.00 dated March 31, 2010 between C2 Global Technologies Inc. and Counsel Corporation. (14)
|
|
10.21
|
Promissory Note for $207,036.21 dated March 31, 2010 between C2 Global Technologies Inc. and Counsel Corporation. (14)
|
|
10.22
|
Promissory Note for $341,978.44 dated June 30, 2010 between C2 Global Technologies Inc. and Counsel Corporation. (15)
|
|
10.23
|
Promissory Note for $90,000.00 dated June 30, 2010 between C2 Global Technologies Inc. and Counsel Corporation. (15)
|
|
10.24
|
Promissory Note for $26,781.64 dated June 30, 2010 between C2 Global Technologies Inc. and Counsel Corporation. (15)
|
|
10.25
|
LLC Interest Purchase Agreement between C2 Global Technologies Inc. and Kind Chin Associates, LLC, dated as of December 10, 2010. (16)
|
|
10.26
|
LLC Interest Purchase Agreement between C2 Global Technologies Inc. and Forsons Equity, LLC, dated as of December 10, 2010. (16)
|
|
10.27*
|
Employment Agreement between C2 Global Technologies Inc. and Jonathan Reich, dated as of January 19, 2011. (12)
|
|
10.28*
|
Employment Agreement between C2 Global Technologies Inc. and Adam Reich, dated as of January 19, 2011. (12)
|
Exhibit Number
|
Title of Exhibit
|
|
10.29*
|
Form of Option Grant for Options Granted Under 2010 Non-Qualified Stock Option Plan. (included herewith)
|
|
10.30
|
Share Purchase Agreement between Counsel RB Capital Inc. and Werklund Capital Corporation, dated as of March 15, 2011. (17)
|
|
14
|
C2 Global Technologies Inc. Code of Conduct. (6)
|
|
|
||
21
|
List of subsidiaries. (filed herewith)
|
|
31.1
|
Certification of the CEO pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
|
31.2
|
Certification of the CFO pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
|
32.1
|
Certification pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (filed herewith)
|
|
32.2
|
Certification pursuant to 18 U.S. C. 1350 as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (filed herewith)
|
|
(16) Incorporated by reference to our Current Report on Form 8-K filed on December 14, 2010.
|
|
(17) Incorporated by reference to our Current Report on Form 8-K filed on March 18, 2011.
|
COUNSEL RB CAPITAL INC.
|
|||
(Registrant)
|
|||
Dated: March 31, 2011
|
By:
|
/s/ Allan C. Silber
|
|
Allan C. Silber, Chairman of the Board and President
|
|||
Principal Executive Officer
|
Signature
|
Title
|
Date
|
||
/s/ Allan C. Silber
|
Chairman of the Board of Directors and President
|
March 31, 2011
|
||
Allan C. Silber
|
Principal Executive Officer
|
|||
/s/Jonathan S. Reich
|
Co-Chief Executive Officer
|
March 31, 2011
|
||
Jonathan S. Reich
|
||||
/s/Adam M. Reich
|
Co-Chief Executive Officer
|
March 31, 2011
|
||
Adam M. Reich
|
||||
/s/Stephen A. Weintraub
|
Executive Vice President, Chief Financial Officer and
Corporate Secretary
|
March 31, 2011
|
||
Stephen A. Weintraub
|
Principal Financial Officer
|
|||
/s/ Catherine A. Moran
|
Vice President of Accounting and Controller
|
March 31, 2011
|
||
Catherine A. Moran
|
||||
/s/ Hal B. Heaton
|
Director
|
March 31, 2011
|
||
Hal B. Heaton
|
||||
/s/ Samuel L. Shimer
|
Director
|
March 31, 2011
|
||
Samuel L. Shimer
|
||||
/s/ Henry Y. L. Toh
|
Director
|
March 31, 2011
|
||
Henry Y.L. Toh
|
||||
/s/ David L. Turock
|
Director
|
March 31, 2011
|
||
David L. Turock
|
/s/ Deloitte & Touche LLP
|
|
2010
|
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 | ||||||
Commitments and contingencies
|
||||||||
Equity:
|
||||||||
Preferred stock, $10.00 par value, 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 | ||||
2010
|
2009
|
2008
|
||||||||||
Revenue:
|
||||||||||||
Asset liquidation
|
||||||||||||
Asset sale proceeds | $ | 2,733 | $ | 5,773 | $ | — | ||||||
Commissions and other | 533 | 218 | — | |||||||||
Total asset liquidation revenue | 3,266 | 5,991 | — | |||||||||
Patent licensing
|
— | — | 17,625 | |||||||||
Total revenue
|
3,266 | 5,991 | 17,625 | |||||||||
Operating costs and expenses:
|
||||||||||||
Asset liquidation
|
2,087 | 4,138 | — | |||||||||
Asset liquidation costs paid to a related party
|
25 | — | — | |||||||||
Patent licensing
|
128 | 29 | 10,729 | |||||||||
Selling, general and administrative
|
2,798 | 2,235 | 913 | |||||||||
Expenses paid to related parties
|
434 | 422 | 360 | |||||||||
Depreciation and amortization
|
— | — | 20 | |||||||||
Total operating costs and expenses
|
5,472 | 6,824 | 12,022 | |||||||||
(2,206 | ) | (833 | ) | 5,603 | ||||||||
Earnings of equity accounted asset liquidation investments
|
7,586 | 64 | — | |||||||||
Operating income (loss)
|
5,380 | (769 | ) | 5,603 | ||||||||
Other income (expenses):
|
||||||||||||
Other income (expense)
|
(5 | ) | (88 | ) | 442 | |||||||
Goodwill impairment
|
(173 | ) | — | — | ||||||||
Interest expense – third party
|
(272 | ) | (217 | ) | — | |||||||
Interest expense – related party
|
(64 | ) | (108 | ) | (43 | ) | ||||||
Total other income (expenses)
|
(514 | ) | (413 | ) | 399 | |||||||
Income (loss) from continuing operations before the undernoted
|
4,866 | (1,182 | ) | 6,002 | ||||||||
Income tax expense (recovery)
|
(1,318 | ) | 269 | 125 | ||||||||
Earnings (loss) of other equity accounted investments (net of $0 tax)
|
30 | 252 | (38 | ) | ||||||||
Income (loss) from continuing operations
|
6,214 | (1,199 | ) | 5,839 | ||||||||
Loss from discontinued operations
|
— | — | (12 | ) | ||||||||
Net income (loss) and comprehensive income (loss)
|
6,214 | (1,199 | ) | 5,827 | ||||||||
Net (income) and comprehensive (income) loss attributable to non-controlling interest
|
(1,385 | ) | (65 | ) | — | |||||||
Net income (loss) and comprehensive income (loss) attributable to controlling interest
|
$ | 4,829 | $ | (1,264 | ) | $ | 5,827 | |||||
Weighted average common shares outstanding
|
22,887 | 22,723 | 22,907 | |||||||||
Weighted average preferred shares outstanding
|
1 | 1 | 1 | |||||||||
Earnings (loss) per share – basic and diluted:
|
||||||||||||
Earnings (loss) from continuing operations
|
||||||||||||
Common shares
|
$ | 0.21 | $ | (0.06 | ) | $ | 0.25 | |||||
Preferred shares
|
$ | 8.43 | N/A | $ | 10.19 | |||||||
Earnings (loss) from discontinued operations
|
||||||||||||
Common shares
|
$ | — | $ | — | $ | — | ||||||
Preferred shares
|
— | — | N/A | |||||||||
Earnings (loss)
|
||||||||||||
Common shares
|
$ | 0.21 | $ | (0.06 | ) | $ | 0.25 | |||||
Preferred shares
|
$ | 8.43 | N/A | $ | 10.19 |
Preferred stock
|
Common stock
|
Additional
paid-in
|
Accumulated
Equity
|
Non-
controlling
|
||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
capital
|
(Deficit)
|
interest
|
Total
|
|||||||||||||||||||||||||
Balance at December 31, 2007
|
607 | $ | 6 | 23,095,016 | $ | 231 | $ | 274,672 | $ | (275,850 | ) | $ | — | $ | (941 | ) | ||||||||||||||||
Conversion of Class N preferred stock to common stock
|
(13 | ) | — | 520 | — | — | — | — | — | |||||||||||||||||||||||
Cancellation of common stock
|
— | — | (350,000 | ) | (4 | ) | 4 | — | — | — | ||||||||||||||||||||||
Compensation cost related to stock options
|
— | — | — | — | 85 | — | — | 85 | ||||||||||||||||||||||||
Net income
|
— | — | — | — | — | 5,827 | — | 5,827 | ||||||||||||||||||||||||
Balance at December 31, 2008
|
594 | 6 | 22,745,536 | 227 | 274,761 | (270,023 | ) | — | 4,971 | |||||||||||||||||||||||
Capital contribution
|
— | — | — | — | — | — | 237 | 237 | ||||||||||||||||||||||||
Purchase and cancellation of preferred and common stock
|
(2 | ) | — | (27,456 | ) | — | (126 | ) | — | — | (126 | ) | ||||||||||||||||||||
Compensation cost related to stock options
|
— | — | — | — | 71 | — | — | 71 | ||||||||||||||||||||||||
Net loss
|
— | — | — | — | — | (1,264 | ) | 65 | (1,199 | ) | ||||||||||||||||||||||
Balance at December 31, 2009
|
592 | 6 | 22,718,080 | 227 | 274,706 | (271,287 | ) | 302 | 3,954 | |||||||||||||||||||||||
Issuance of common stock
|
— | — | 3,242,000 | 32 | — | — | (32 | ) | — | |||||||||||||||||||||||
Distribution to non-controlling interest
|
— | — | — | — | — | — | (766 | ) | (766 | ) | ||||||||||||||||||||||
Transfer from non-controlling interest to controlling interest
|
— | — | — | — | 889 | — | (889 | ) | — | |||||||||||||||||||||||
Compensation cost related to stock options
|
— | — | — | — | 46 | — | — | 46 | ||||||||||||||||||||||||
Net income
|
— | — | — | — | — | 4,829 | 1,385 | 6,214 | ||||||||||||||||||||||||
Balance at December 31, 2010
|
592 | $ | 6 | 25,960,080 | $ | 259 | $ | 275,641 | $ | (266,458 | ) | $ | — | $ | 9,448 |
2010
|
2009
|
2008
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income (loss) from continuing operations
|
$ | 6,214 | $ | (1,199 | ) | $ | 5,839 | |||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
||||||||||||
Accrued interest added to principal of third party debt
|
13 | 61 | — | |||||||||
Amortization of financing costs on debt payable to third party
|
80 | 112 | — | |||||||||
Accrued interest added to principal of related party debt
|
— | 108 | — | |||||||||
Stock-based compensation expense
|
46 | 71 | 85 | |||||||||
Write-down of equity accounted asset liquidation investments
|
— | 212 | — | |||||||||
Loss (earnings) of equity accounted investments
|
(30 | ) | (252 | ) | 38 | |||||||
Provision for doubtful accounts
|
168 | — | — | |||||||||
Write-down of inventory
|
123 | 113 | — | |||||||||
Goodwill impairment
|
173 | — | — | |||||||||
Gain on sale of investments
|
(332 | ) | (21 | ) | (425 | ) | ||||||
Depreciation and amortization
|
— | — | 20 | |||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Decrease (increase) in accounts receivable
|
854 | (1,000 | ) | — | ||||||||
Decrease (increase) in note receivable
|
428 | (653 | ) | — | ||||||||
Increase in deposits
|
(471 | ) | (300 | ) | — | |||||||
Increase in inventory
|
(2,452 | ) | (1,951 | ) | — | |||||||
Decrease (increase) in investment in asset liquidation investments
|
395 | (4,155 | ) | — | ||||||||
Increase in other assets
|
(425 | ) | (145 | ) | (60 | ) | ||||||
Decrease (increase) in deferred income tax assets
|
(1,499 | ) | 146 | 125 | ||||||||
Increase in accounts payable and accrued liabilities
|
1,098 | 985 | 70 | |||||||||
Increase in income taxes payable
|
172 | 26 | — | |||||||||
Net cash provided by (used in) operating activities by continuing operations
|
4,555 | (7,842 | ) | 5,692 | ||||||||
Net cash used in operating activities by discontinued operations
|
— | — | (12 | ) | ||||||||
Net cash provided by (used in) operating activities by continuing and discontinued operations
|
4,555 | (7,842 | ) | 5,680 | ||||||||
Cash flows from investing activities:
|
||||||||||||
Investment in other equity accounted investments
|
(316 | ) | (2,631 | ) | — | |||||||
Cash distributions from other equity accounted investments
|
304 | 237 | 8 | |||||||||
Purchase of investments
|
— | — | (125 | ) | ||||||||
Proceeds from sale of investments
|
456 | 121 | 781 | |||||||||
Net cash provided by (used in) investing activities
|
444 | (2,273 | ) | 664 | ||||||||
Cash flows from financing activities:
|
||||||||||||
Proceeds from issuance of debt payable to third parties
|
12,732 | 6,765 | — | |||||||||
Repayment of debt payable to third parties
|
(12,886 | ) | (2,200 | ) | — | |||||||
Proceeds from issuance of debt payable to a related party
|
2,126 | 3,632 | — | |||||||||
Repayment of debt payable to a related party
|
(3,690 | ) | (2,176 | ) | (2,335 | ) | ||||||
Non-controlling interest contribution
|
— | 237 | — | |||||||||
Distribution to non-controlling interest
|
(766 | ) | — | — | ||||||||
Purchase and cancellation of common and preferred shares
|
— | (126 | ) | — | ||||||||
Net cash provided by (used in) financing activities
|
(2,484 | ) | 6,132 | (2,335 | ) | |||||||
Increase (decrease) in cash
|
2,515 | (3,983 | ) | 4,009 | ||||||||
Cash at beginning of year
|
93 | 4,076 | 67 | |||||||||
Cash at end of year
|
$ | 2,608 | $ | 93 | $ | 4,076 |
2010
|
2009
|
2008
|
||||||||||
Supplemental schedule of non-cash investing and financing activities:
|
||||||||||||
Issuance of common stock in exchange for non-controlling interest
|
$ | 32 | $ | — | $ | — | ||||||
Transfer of non-controlling interest to additional paid-in capital in exchange for common stock
|
889 | — | — | |||||||||
Supplemental cash flow information:
|
||||||||||||
Taxes paid
|
24 | 96 | — | |||||||||
Interest paid
|
243 | 42 | 43 |
2010
|
2009
|
|||||||
Current assets
|
$ | 4,983 | $ | 3,471 | ||||
Noncurrent assets
|
$ | 34 | $ | 739 | ||||
Current liabilities
|
$ | 1,469 | $ | 268 | ||||
Noncurrent liabilities
|
$ | — | $ | — |
2010
|
2009
|
|||||||
Gross revenues
|
$ | 22,262 | $ | 3,479 | ||||
Gross profit
|
$ | 7,758 | $ | 35 | ||||
Income from continuing operations
|
$ | 7,586 | $ | 64 | ||||
Net income
|
$ | 7,586 | $ | 64 | ||||
Net income after non-controlling interest
|
$ | 6,011 | $ | 48 |
|
2010
|
2009
|
2008
|
|||||||||
Assumed exercise of options and warrant to purchase shares of common stock
|
648,246 | 994,027 | 1,979,027 |
2010
|
2009
|
|||||||
Buddy Media, Inc.
|
$ | — | $ | 124 | ||||
Knight’s Bridge Capital Partners Internet Fund No. 1 GP LLC
|
18 | 18 | ||||||
Polaroid
|
2,688 | 2,646 | ||||||
Total investments
|
$ | 2,706 | $ | 2,788 |
|
·
|
CRBCI invested $530 to acquire Class D units. These units are subject to a 2% annual management fee, payable to the General Partner. The units have a 10% per annum preferred return; any profits generated in addition to the preferred return, subsequent to the return of invested capital, are subject to the Management LP’s 20% carried interest. Following cash distributions of $46 in 2009 and $56 in 2010, and an additional investment of $54 in 2010, the Company’s cumulative cash investment totals $482.
|
|
·
|
CRBCI invested $2,091 to acquire Counsel’s rights and obligations as an indirect limited partner (but not Counsel’s limited partnership interest) in Knight’s Bridge Capital Partners Fund I, L.P. (“Knight’s Bridge Fund”), a related party, with respect to the Polaroid investment. The investment in these units is held by Knight’s Bridge Fund in the name of a Canadian limited partnership (the “LP”) comprised of Counsel (95.24%) and several parties related to Counsel. The $2,091 was Counsel’s share of the LP’s investment and was funded by Counsel. Subsequent to making the investment in the LP, Counsel sold, to CRBCI, the economic benefit of its indirect investment in Polaroid in return for a loan (under a pre-existing loan facility that is discussed in more detail in Note 7 and Note 11) bearing interest at 10% per annum. CRBCI is also responsible for reimbursing Counsel for its share of the management fees, which are 2% of the investment. The economic interest entitles CRBCI to an 8% per annum preferred return; any profits generated in addition to the preferred return, subsequent to the return of invested capital, are subject to the general partner of the Knight’s Bridge Fund’s 20% carried interest. Following additional investments of $11 in 2009 and $263 in 2010, and cash distributions of $186 and $233 in 2009 and 2010, respectively, the Company’s cumulative cash investment totals $1,946.
|
|
2010
|
2009
|
||||||
Accounts receivable (net of allowance for doubtful accounts of $22; 2009 - $0)
|
$ | 124 | $ | 1,000 | ||||
Notes receivable (net of allowance for doubtful accounts of $146; 2009 - $0)
|
79 | 653 | ||||||
$ | 203 | $ | 1,653 |
|
2010
|
2009
|
||||||
Regulatory and legal fees
|
$ | 612 | $ | 628 | ||||
Distributions payable to former non-controlling interest
|
766 | — | ||||||
Accounting, auditing and tax consulting
|
118 | 89 | ||||||
Due to Joint Venture partners
|
178 | 522 | ||||||
Customer deposits
|
313 | — | ||||||
Patent licensing and maintenance
|
118 | — | ||||||
Sales and other taxes
|
81 | 62 | ||||||
Remuneration and benefits
|
228 | 91 | ||||||
Other
|
141 | 65 | ||||||
$ | 2,555 | $ | 1,457 |
December 31,
2010
|
December 31,
2009
|
|||||||
Revolving Credit Facility
|
$ | 4,485 | $ | 3,213 | ||||
Promissory Note
|
— | 1,413 | ||||||
4,485 | 4,626 | |||||||
Related party debt
|
— | 1,564 | ||||||
4,485 | 6,190 | |||||||
Less current portion
|
4,485 | 6,190 | ||||||
Long-term debt, less current portion
|
$ | — | $ | — |
2011
|
$ | 152 | |||
2012
|
$ | 156 | |||
2013
|
$ | 154 | |||
2014
|
$ | 141 | |||
2015
|
$ | 148 |
|
2010
|
2009
|
2008
|
|||||||||
Expected federal statutory tax expense (benefit)
|
$ | 1,202 | $ | (339 | ) | $ | 2,028 | |||||
Increase (reduction) in taxes resulting from:
|
||||||||||||
State income taxes
|
161 | 26 | — | |||||||||
Non-deductible items
|
86 | 43 | 51 | |||||||||
Change in valuation allowance attributable to continuing operations, net
|
(14,277 | ) | 446 | (1,966 | ) | |||||||
Capital loss expiry
|
11,542 | — | — | |||||||||
Other
|
(32 | ) | 93 | 12 | ||||||||
Income tax expense (recovery)
|
$ | (1,318 | ) | $ | 269 | $ | 125 |
2010
|
2009
|
2008
|
||||||||||
Net operating loss carry forwards
|
$ | 29,222 | $ | 29,859 | $ | 28,420 | ||||||
Net capital loss carry forwards
|
125 | 11,788 | 11,691 | |||||||||
Acquired in-process research and development and intangible assets
|
275 | 653 | 972 | |||||||||
Stock-based compensation
|
127 | 118 | 105 | |||||||||
Start-up costs
|
33 | 35 | — | |||||||||
Accrued liabilities
|
7 | 7 | 7 | |||||||||
Reserve for accounts receivable
|
2 | 2 | 2 | |||||||||
Other
|
226 | 363 | 17 | |||||||||
Valuation allowance
|
(27,789 | ) | (42,096 | ) | (40,339 | ) | ||||||
Total deferred tax assets
|
2,228 | 729 | 875 | |||||||||
Deferred tax liabilities
|
— | — | — | |||||||||
Net deferred tax assets
|
$ | 2,228 | $ | 729 | $ | 875 |
Beginning unrecognized tax benefit
|
$ | 12,059 | ||
Increase (decrease) related to prior year positions
|
— | |||
Increase (decrease) related to current year positions
|
— | |||
Ending unrecognized tax benefit
|
$ | 12,059 |
Number of Shares
|
Capital Stock
|
|||||||||||||||
Issued and outstanding
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Common shares, $0.01 par value
|
25,960,080 | 22,718,080 | $ | 259 | $ | 227 | ||||||||||
Class N preferred shares, $10.00 par value
|
592 | 592 | $ | 6 | $ | 6 |
2010
|
2009
|
2008
|
||||||||||
Risk-free interest rate
|
1.40 | % | 1.37 | % | 1.80 | % | ||||||
Expected life (years)
|
4.75 | 4.75 | 4.75 | |||||||||
Expected volatility
|
257.8 | % | 228.9 | % | 198.4 | % | ||||||
Expected dividend yield
|
Zero
|
Zero
|
Zero
|
|||||||||
Expected forfeitures
|
Zero
|
Zero
|
Zero
|
2010
|
2009
|
2008
|
||||||||||||||||||||||
Options
|
Weighted
Average
Exercise
Price
|
Options
|
Weighted
Average
Exercise
Price
|
Options
|
Weighted
Average
Exercise
Price
|
|||||||||||||||||||
Outstanding at beginning of year
|
994,027 | $ | 6.02 | 979,027 | $ | 7.73 | 975,749 | $ | 9.88 | |||||||||||||||
Granted
|
40,000 | $ | 0.08 | 40,000 | $ | 0.15 | 40,000 | $ | 0.90 | |||||||||||||||
Exercised
|
— | $ | — | — | $ | — | — | $ | — | |||||||||||||||
Expired
|
(305,781 | ) | $ | 17.47 | (25,000 | ) | $ | 63.44 | (36,722 | ) | $ | 57.53 | ||||||||||||
Forfeited
|
— | $ | — | — | $ | — | — | $ | — | |||||||||||||||
Outstanding at end of year
|
728,246 | $ | 0.89 | 994,027 | $ | 6.02 | 979,027 | $ | 7.73 | |||||||||||||||
Options exercisable at year end
|
630,746 | $ | 0.98 | 795,277 | $ | 7.35 | 681,527 | $ | 10.75 | |||||||||||||||
Weighted-average fair value of options granted during the year
|
$ | 0.08 | $ | 0.15 | $ | 0.87 |
Options
|
Weighted
Average
Grant Date
Fair Value
|
|||||||
Unvested at December 31, 2009
|
198,750 | $ | 0.48 | |||||
Granted
|
40,000 | $ | 0.08 | |||||
Vested
|
(141,250 | ) | $ | 0.50 | ||||
Expired
|
— | $ | — | |||||
Unvested at December 31, 2010
|
97,500 | $ | 0.29 |
Options
|
Weighted
Average
Grant Date
Fair Value
|
|||||||
Unvested at December 31, 2008
|
297,500 | $ | 0.54 | |||||
Granted
|
40,000 | $ | 0.15 | |||||
Vested
|
(138,750 | ) | $ | 0.52 | ||||
Expired
|
— | $ | — | |||||
Unvested at December 31, 2009
|
198,750 | $ | 0.48 |
Options
|
Weighted
Average
Grant Date
Fair Value
|
|||||||
Unvested at December 31, 2007
|
425,813 | $ | 0.51 | |||||
Granted
|
40,000 | $ | 0.87 | |||||
Vested
|
(168,313 | ) | $ | 0.54 | ||||
Expired
|
— | $ | — | |||||
Unvested at December 31, 2008
|
297,500 | $ | 0.54 |
Exercise price
|
Options
Outstanding
|
Weighted
Average
Remaining
Life (years)
|
Weighted
Average
Exercise
Price
|
Number
Exercisable
|
Weighted
Average
Remaining
Life (years)
|
Weighted
Average
Exercise
Price
|
||||||||||||||||||||
$ | 0.08 to $ 1.11 | 715,000 | 2.78 | $ | 0.73 | 617,500 | 2.38 | $ | 0.79 | |||||||||||||||||
$ | 1.40 to $ 2.40 | 9,448 | 1.01 | $ | 2.01 | 9,448 | 1.01 | $ | 2.01 | |||||||||||||||||
$ | 6.88 to $ 15.62 | 2,965 | 0.02 | $ | 14.99 | 2,965 | 0.02 | $ | 14.99 | |||||||||||||||||
$ | 78.00 | 833 | 0.67 | $ | 78.00 | 833 | 0.67 | $ | 78.00 | |||||||||||||||||
728,246 | 2.74 | $ | 0.89 | 630,746 | 2.35 | $ | 0.98 |
For the Year Ended December 31, 2010
Reportable Segments
|
||||||||||||
Asset
Liquidation
|
Patent
Licensing
|
Total
|
||||||||||
Revenues from external customers
|
$ | 3,266 | $ | — | $ | 3,266 | ||||||
Earnings from equity accounted asset liquidation investments
|
7,586 | — | 7,586 | |||||||||
Other income (expense)
|
(337 | ) | (173 | ) | (510 | ) | ||||||
Interest expense
|
272 | — | 272 | |||||||||
Depreciation and amortization
|
— | — | — | |||||||||
Segment income (loss) from continuing operations
|
6,114 | (305 | ) | 5,809 | ||||||||
Investment in equity accounted asset liquidation investees
|
3,548 | — | 3,548 | |||||||||
Segment assets
|
10,677 | 28 | 10,705 |
For the Year Ended December 31, 2009
Reportable Segments
|
||||||||||||
Asset
Liquidation
|
Patent
Licensing
|
Total
|
||||||||||
Revenues from external customers
|
$ | 5,991 | $ | — | $ | 5,991 | ||||||
Earnings from equity accounted asset liquidation investments
|
64 | — | 64 | |||||||||
Other income (expense)
|
(109 | ) | — | (109 | ) | |||||||
Interest expense
|
217 | — | 217 | |||||||||
Depreciation and amortization
|
— | — | — | |||||||||
Segment income (loss) from continuing operations
|
318 | (62 | ) | 256 | ||||||||
Investment in equity accounted asset liquidation investees
|
3,943 | — | 3,943 | |||||||||
Segment assets
|
7,842 | 201 | 8,043 |
For the Year Ended December 31, 2008
Reportable Segments
|
||||||||||||
Asset Liquidation
|
Patent
Licensing
|
Total
|
||||||||||
Revenues from external customers
|
$ | — | $ | 17,625 | $ | 17,625 | ||||||
Earnings from equity accounted asset liquidation investments
|
— | — | — | |||||||||
Other income (expense)
|
— | — | — | |||||||||
Interest expense
|
— | — | — | |||||||||
Depreciation and amortization
|
— | 20 | 20 | |||||||||
Segment income (loss) from continuing operations
|
— | 6,797 | 6,797 | |||||||||
Investment in equity accounted asset liquidation investees
|
— | — | — | |||||||||
Segment assets
|
— | 173 | 173 |
Year ended
December 31,
2010
|
Year ended
December 31,
2009
|
Year ended
December 31,
2008
|
||||||||||
Total other income (loss) and earnings from equity investments for reportable segments
|
$ | 7,076 | $ | (45 | ) | $ | — | |||||
Unallocated other income and earnings from equity investments from corporate accounts
|
362 | 273 | 404 | |||||||||
$ | 7,438 | $ | 228 | $ | 404 | |||||||
Total interest expense for reportable segments
|
$ | 272 | $ | 217 | $ | — | ||||||
Unallocated interest expense from third party debt
|
— | — | — | |||||||||
Unallocated interest expense from related party debt
|
64 | 108 | 43 | |||||||||
$ | 336 | $ | 325 | $ | 43 | |||||||
Total depreciation and amortization for reportable segments
|
$ | — | $ | — | $ | 20 | ||||||
Other unallocated depreciation from corporate assets
|
— | — | — | |||||||||
$ | — | $ | — | $ | 20 | |||||||
Total segment income
|
$ | 5,809 | $ | 256 | $ | 6,797 | ||||||
Other income
|
362 | 273 | 404 | |||||||||
Other corporate expenses (primarily corporate level interest, general and administrative expenses)
|
(1,275 | ) | (1,459 | ) | (1,237 | ) | ||||||
Income tax expense (recovery)
|
(1,318 | ) | 269 | 125 | ||||||||
Net income (loss) from continuing operations
|
$ | 6,214 | $ | (1,199 | ) | $ | 5,839 | |||||
Segment assets
|
$ | 10,705 | $ | 8,043 | $ | 173 | ||||||
Intangible assets not allocated to segments
|
— | — | — | |||||||||
Other assets not allocated to segments
(1)
|
5,981 | 3,584 | 5,270 | |||||||||
$ | 16,686 | $ | 11,627 | $ | 5,443 |
|
(1)
|
Other assets not allocated to segments are corporate assets such as cash, non-trade accounts receivable, prepaid insurance, investments and deferred income tax assets.
|
March 31
|
June 30
|
September 30
|
December 31
|
||||||||||||||
Net sales
|
2010
|
$ | 2,233 | $ | 488 | $ | 340 | $ | 205 | ||||||||
2009
|
$ | — | $ | 35 | $ | 1,869 | $ | 4,087 | |||||||||
Gross profit
|
2010
|
$ | 1,125 | $ | 2,791 | $ | 1,455 | $ | 3,241 | ||||||||
2009
|
$ | (1 | ) | $ | 426 | $ | 1,012 | $ | 451 | ||||||||
Operating income (loss)
|
2010
|
$ | 499 | $ | 2,181 | $ | 794 | $ | 1,906 | ||||||||
2009
|
$ | (388 | ) | $ | (282 | ) | $ | 419 | $ | (518 | ) | ||||||
Net income (loss)
|
2010
|
$ | 379 | $ | 1,700 | $ | 932 | $ | 3,203 | ||||||||
2009
|
$ | (379 | ) | $ | (259 | ) | $ | 308 | $ | (869 | ) | ||||||
Net income (loss) attributable to the controlling interest
|
2010
|
$ | 223 | $ | 1,149 | $ | 649 | $ | 2,808 | ||||||||
2009
|
$ | (342 | ) | $ | (253 | ) | $ | 244 | $ | (913 | ) | ||||||
Basic and diluted income (loss) from continuing operations per common share
|
2010
|
$ | 0.02 | $ | 0.07 | $ | 0.04 | $ | 0.14 | ||||||||
2009
|
$ | (0.02 | ) | $ | (0.01 | ) | $ | 0.01 | $ | (0.04 | ) | ||||||
Basic and diluted income from continuing operations per preferred share
|
2010
|
$ | 0.67 | $ | 2.99 | $ | 1.64 | $ | 5.48 | ||||||||
2009
|
$ | N/A | $ | N/A | $ | 0.54 | $ | N/A | |||||||||
Basic and diluted income (loss) per common share
|
2010
|
$ | 0.01 | $ | 0.05 | $ | 0.03 | $ | 0.12 | ||||||||
2009
|
$ | (0.02 | ) | $ | (0.01 | ) | $ | 0.01 | $ | (0.04 | ) | ||||||
Basic and diluted income per preferred share
|
2010
|
$ | 0.39 | $ | 2.02 | $ | 1.14 | $ | 4.80 | ||||||||
2009
|
$ | N/A | $ | N/A | $ | 0.43 | $ | N/A |
March 31
|
June 30
|
September 30
|
December 31
|
||||||||||||||
Current assets
|
2010
|
$ | 2,447 | $ | 2,896 | $ | 2,439 | $ | 8,859 | ||||||||
2009
|
$ | 4,491 | $ | 3,193 | $ | 4,682 | $ | 3,327 | |||||||||
Total assets
|
2010
|
$ | 12,964 | $ | 12,025 | $ | 10,822 | $ | 16,686 | ||||||||
2009
|
$ | 4,906 | $ | 9,411 | $ | 10,515 | $ | 11,627 | |||||||||
Current liabilities
|
2010
|
$ | 8,613 | $ | 5,957 | $ | 3,814 | $ | 7,238 | ||||||||
2009
|
$ | 438 | $ | 4,923 | $ | 5,703 | $ | 7,673 | |||||||||
Total liabilities
|
2010
|
$ | 8,613 | $ | 5,957 | $ | 3,814 | $ | 7,238 | ||||||||
2009
|
$ | 438 | $ | 4,923 | $ | 5,703 | $ | 7,673 | |||||||||
Total shareholders’ equity
|
2010
|
$ | 4,351 | $ | 6,068 | $ | 7,008 | $ | 9,448 | ||||||||
2009
|
$ | 4,468 | $ | 4,488 | $ | 4,812 | $ | 3,954 |
Description
|
Balance at
Beginning
of Period
|
Charged to
Costs and
Expenses
|
Deductions
(a)
|
Other
|
Balance at
End of
Period
|
|||||||||||||||
Allowance for doubtful accounts:
|
||||||||||||||||||||
December 31, 2008
|
$ | 6 | $ | — | $ | — | $ | — | $ | 6 | ||||||||||
December 31, 2009
|
$ | 6 | $ | — | $ | — | $ | — | $ | 6 | ||||||||||
December 31, 2010
|
$ | 6 | $ | 168 | $ | — | $ | — | $ | 174 |
(a)
|
Deductions represents allowance amounts written off as uncollectible and recoveries of previously reserved amounts.
|
$ | ||||
ASSETS
|
||||
Current assets:
|
||||
Cash
|
1,606,570 | |||
Other current assets
|
90 | |||
Total current assets
|
1,606,660 | |||
Other assets
|
- | |||
Total assets
|
1,606,660 | |||
LIABILITIES AND MEMBERS’ EQUITY
|
||||
Current liabilities
|
||||
Accrued liabilities
|
1,606,660 | |||
Total liabilities
|
1,606,660 | |||
Commitments and guarantees
|
||||
Members’ equity:
|
||||
Members’ contributions (distributions)
|
(4,121,752 | ) | ||
Retained earnings
|
4,121,752 | |||
Total members’ equity
|
- | |||
Total liabilities and members’ equity
|
1,606,660 |
$ | ||||
Revenue
|
||||
Asset liquidation
|
8,155,645 | |||
Total revenue
|
8,155,645 | |||
Operating costs and expenses
|
||||
Asset liquidation
|
3,797,639 | |||
Other expenses
|
236,243 | |||
Selling, general & administrative expense
|
11 | |||
Total operating cost and expenses
|
4,033,893 | |||
Net Income and comprehensive income
|
4,121,752 |
$ | ||||
Cash flows from operating activities
|
||||
Net income
|
4,121,752 | |||
Adjustments to reconcile net income to net cash provided by (used in)
operating activities
|
||||
Changes in operating assets and liabilities:
|
||||
Other current assets
|
(90 | ) | ||
Accrued liabilities
|
1,606,660 | |||
Net cash provided by operating activities
|
5,728,322 | |||
Cash flows from financing activities
|
||||
Partners’ capital contributions
|
3,502,750 | |||
Partners’ capital distributions
|
(7,624,502 | ) | ||
Net cash provided by financing activities
|
(4,121,752 | ) | ||
Increase in cash
|
1,606,570 | |||
Cash, beginning of period
|
- | |||
Cash, end of period
|
1,606,570 |
$ | ||||
Opening balance
|
- | |||
Capital contributions
|
3,502,750 | |||
Capital distributions
|
(7,624,502 | ) | ||
Net income for period
|
4,121,752 | |||
Balance, December 31, 2010
|
- |
Option Holder:
|
______________
|
|
Date of Grant:
|
______________
|
|
|
||
Number of Shares Subject to Option:
|
______________
|
|
Exercise Price (Per Share):
|
$_____________
|
|
Expiration Date:
|
See the Stock Option Agreement.
|
|
Type of Grant:
|
Non-Qualified Option.
|
|
Vesting Schedule:
|
Subject to the conditions of the Stock Option Agreement and the Plan, the option shall vest and shall become exercisable with respect to twenty-five percent (25%) of the shares subject to the option on each of the first, second, third and fourth anniversaries of the Grant Date.
|
|
Payment:
|
See Section 7.1 of the Plan.
|
|
Additional Terms/Acknowledgements:
|
The undersigned option holder acknowledges receipt of, and understands and agrees to, this Grant Notice, the Stock Option Agreement and the Plan. Option holder further acknowledges that as of the Date of Grant, this Grant Notice, the Stock Option Agreement and the Plan set forth the entire understanding between option holder and the Company regarding the acquisition of stock in the Company and supersede all prior oral and written agreements on that subject.
|
|
C2 GLOBAL TECHNOLOGIES INC.
|
OPTION HOLDER:
|
||
By:
|
|||
Its:
|
[Name]
|
|
(a)
|
Ten (10) years after the date of the grant; or
|
C2 GLOBAL TECHNOLOGIES INC.
|
OPTION HOLDER:
|
||
By:
|
|
||
Its:
|
|
[Name]
|
OPTIONEE:
|
|
[Name]
|
Name
|
State of Incorporation
|
ACRS Local Communications Inc.
|
Delaware
|
C2 Communications Technologies, Inc.
|
Delaware
|
C2 Investments Inc.
|
Delaware
|
I-Link Systems Inc.
|
Utah
|
Mibridge Inc.
|
Utah
|
WebtoTel Inc.
|
Delaware
|
CPT-1 Holdings Inc.
|
Delaware
|
Counsel RB Capital LLC
|
Delaware
|
Moving Images NY LLC |
Delaware
|
Greystone Private Equity LLC |
Delaware
|
221 Fabritek Dr LLC |
Delaware
|
FP Acquisitions LLC |
Delaware
|
C2 Opportunity GP, LP
|
Delaware
|
C2 Realty GP, LP
|
Delaware
|
C2 Capital, LP
|
Delaware
|
C2 Capital GP LLC
|
Delaware
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of Counsel RB Capital Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
|
/s/ Allan C. Silber
|
|
Allan C. Silber
|
||
Chairman of the Board and President
|
||
Principal Executive Officer
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of Counsel RB Capital Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
|
/s/ Stephen A. Weintraub
|
|
Stephen A. Weintraub
|
||
Executive Vice President, Chief Financial Officer and Corporate Secretary
|
||
Principal Financial Officer
|
|
1.
|
The Report is in full compliance with reporting requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Corporation.
|
/s/ Allan C. Silber
|
|
Allan Silber
|
|
Chairman of the Board and President
|
|
Principal Executive Officer
|
|
1.
|
The Report is in full compliance with reporting requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Corporation.
|
/s/ Stephen A. Weintraub
|
|
Stephen A. Weintraub
|
|
Executive Vice President, Chief Financial Officer and Corporate
Secretary
|
|
Principal Financial Officer
|