FLORIDA
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59-2291344
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(State or other jurisdiction of
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||
Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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Large Accelerated Filer ¨
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Accelerated Filer ¨
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Non-Accelerated Filer þ
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Smaller reporting company ¨
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Part I.
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Financial Information
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Item 1.
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Financial Statements
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||
Unaudited Condensed Consolidated Balance Sheets as of June 30, 2011 and December 31, 2010
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3
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||
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income for the three and six months ended June 30, 2011 and 2010
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4
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||
Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity for the period ended June 30, 2011
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5
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||
Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2011 and 2010
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6
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||
Notes to Unaudited Condensed Consolidated Financial Statements
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7
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||
Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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20
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|
Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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29
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Item 4.
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Controls and Procedures
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29
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Part II.
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Other Information
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||
Item 1.
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Legal Proceedings
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30
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Item 1A.
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Risk Factors
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30
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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30
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Item 3.
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Defaults Upon Senior Securities
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30
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Item 4.
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Removed and Reserved
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30
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Item 5.
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Other Information
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30
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Item 6.
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Exhibits
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31
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As of
June 30,
2011
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As of
December 31,
2010
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|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 7,374 | $ | 2,608 | ||||
Amounts receivable (net of allowance for doubtful accounts of $186; 2010 - $168)
|
890 | 203 | ||||||
Receivable from a related party
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— | 392 | ||||||
Deposits
|
645 | 771 | ||||||
Inventory – equipment
|
1,384 | 2,594 | ||||||
Deferred income tax
|
2,088 | 2,228 | ||||||
Other current assets
|
167 | 63 | ||||||
Total current assets
|
12,548 | 8,859 | ||||||
Other assets:
|
||||||||
Inventory – real estate
|
1,073 | 1,573 | ||||||
Asset liquidation investments
|
1,471 | 3,548 | ||||||
Investments
|
2,784 | 2,706 | ||||||
Property, plant and equipment
|
20 | — | ||||||
Goodwill
|
226 | — | ||||||
Total assets
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$ | 18,122 | $ | 16,686 | ||||
LIABILITIES AND EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued liabilities
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$ | 1,062 | $ | 2,555 | ||||
Income taxes payable
|
363 | 198 | ||||||
Debt payable to third parties
|
921 | 4,485 | ||||||
Debt payable to a related party
|
67 | — | ||||||
Total liabilities
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2,413 | 7,238 | ||||||
Commitments and contingencies
|
||||||||
Equity:
|
||||||||
Preferred stock, $10.00 par value, authorized 10,000,000 shares; issued and outstanding 592 Class N shares at June 30, 2011 and December 31, 2010, liquidation preference of $592 at June 30, 2011 and December 31, 2010
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6 | 6 | ||||||
Common stock, $0.01 par value, authorized 300,000,000 shares; issued and outstanding 27,083,030 shares at June 30, 2011 and 25,960,080 shares at December 31, 2010
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270 | 259 | ||||||
Additional paid-in capital
|
278,162 | 275,641 | ||||||
Accumulated deficit
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(262,729 | ) | (266,458 | ) | ||||
Total equity
|
15,709 | 9,448 | ||||||
Total liabilities and equity
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$ | 18,122 | $ | 16,686 |
Three Months Ended
June 30,
|
Six Months Ended
June 30,
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|||||||||||||||
(In thousands of US dollars, except per share amounts)
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2011
|
2010
|
2011
|
2010
|
||||||||||||
Revenue:
|
||||||||||||||||
Asset liquidation
|
||||||||||||||||
Asset sale proceeds
|
$ | 11,626 | $ | 342 | $ | 12,224 | $ | 2,500 | ||||||||
Commissions and other
|
109 | 146 | 245 | 221 | ||||||||||||
Total asset liquidation revenue
|
11,735 | 488 | 12,469 | 2,721 | ||||||||||||
Operating costs and expenses:
|
||||||||||||||||
Asset liquidation
|
5,697 | 298 | 6,136 | 1,836 | ||||||||||||
Inventory maintenance
|
383 | (17 | ) | 1,553 | (16 | ) | ||||||||||
Patent licensing and maintenance
|
13 | — | 70 | 7 | ||||||||||||
Selling, general and administrative
|
1,140 | 501 | 1,961 | 1,016 | ||||||||||||
Expenses paid to related parties
|
138 | 109 | 285 | 220 | ||||||||||||
Total operating costs and expenses
|
7,371 | 891 | 10,005 | 3,063 | ||||||||||||
4,364 | (403 | ) | 2,464 | (342 | ) | |||||||||||
Earnings of equity accounted asset liquidation investments
|
157 | 2,601 | 1,717 | 3,038 | ||||||||||||
Operating income
|
4,521 | 2,198 | 4,181 | 2,696 | ||||||||||||
Other income (expenses):
|
||||||||||||||||
Other income (expenses)
|
16 | (125 | ) | 16 | (125 | ) | ||||||||||
Interest expense – third party
|
(52 | ) | (97 | ) | (136 | ) | (198 | ) | ||||||||
Interest expense – related party
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— | (35 | ) | — | (64 | ) | ||||||||||
Total other income (expenses)
|
(36 | ) | (257 | ) | (120 | ) | (387 | ) | ||||||||
Income from continuing operations before the undernoted
|
4,485 | 1,941 | 4,061 | 2,309 | ||||||||||||
Income tax expense
|
978 | 314 | 380 | 381 | ||||||||||||
Earnings of other equity accounted investments (net of $0 tax)
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33 | 73 | 48 | 151 | ||||||||||||
Net income and comprehensive income
|
3,540 | 1,700 | 3,729 | 2,079 | ||||||||||||
Net income and comprehensive income attributable to non-controlling interest
|
— | (551 | ) | — | (707 | ) | ||||||||||
Net income and comprehensive income attributable to controlling interest
|
$ | 3,540 | $ | 1,149 | $ | 3,729 | $ | 1,372 | ||||||||
Weighted average common shares outstanding (in thousands)
|
26,997 | 22,718 | 26,562 | 22,718 | ||||||||||||
Weighted average preferred shares outstanding (in thousands)
|
1 | 1 | 1 | 1 | ||||||||||||
Earnings per share – basic and diluted:
|
||||||||||||||||
Common shares
|
$ | 0.13 | $ | 0.05 | $ | 0.14 | $ | 0.06 | ||||||||
Preferred shares
|
$ | 5.24 | $ | 2.02 | $ | 5.61 | $ | 2.41 |
Preferred stock
|
Common stock
|
Additional
paid-in
|
Accumulated
|
Non-
controlling
|
||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
capital
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(Deficit)
|
interest
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Total
|
|||||||||||||||||||||||||
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
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(2 | ) | — | (27,456 | ) | — | (126 | ) | — | — | (126 | ) | ||||||||||||||||||||
Compensation cost related to stock options
|
— | — | — | — | 71 | — | — | 71 | ||||||||||||||||||||||||
Net loss
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— | — | — | — | — | (1,264 | ) | 65 | (1,199 | ) | ||||||||||||||||||||||
Balance at December 31, 2009
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592 | 6 | 22,718,080 | 227 | 274,706 | (271,287 | ) | 302 | 3,954 | |||||||||||||||||||||||
Issuance of common stock
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— | — | 3,242,000 | 32 | — | — | (32 | ) | — | |||||||||||||||||||||||
Distribution to non-controlling interest
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— | — | — | — | — | — | (766 | ) | (766 | ) | ||||||||||||||||||||||
Transfer from non-controlling interest to controlling interest
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— | — | — | — | 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 | |||||||||||||||||||||||
Issuance of common stock
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— | — | 1,122,950 | 11 | 1,995 | — | — | 2,006 | ||||||||||||||||||||||||
Issuance of options
|
— | — | — | — | 460 | — | — | 460 | ||||||||||||||||||||||||
Compensation cost related to stock options
|
— | — | — | — | 66 | — | — | 66 | ||||||||||||||||||||||||
Net income
|
— | — | — | — | — | 3,729 | — | 3,729 | ||||||||||||||||||||||||
Balance at June 30, 2011
|
592 | $ | 6 | 27,083,030 | $ | 270 | $ | 278,162 | $ | (262,729 | ) | $ | — | $ | 15,709 |
(In thousands of US dollars)
|
Six months ended
June30,
|
|||||||
2011
|
2010
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 3,729 | $ | 2,079 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Accrued interest added to principal of third party debt
|
7 | 9 | ||||||
Amortization of financing costs on debt payable to third party
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18 | 80 | ||||||
Accrued interest added to principal of related party debt
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— | 64 | ||||||
Stock-based compensation expense
|
66 | 35 | ||||||
Earnings of equity accounted investments
|
(48 | ) | (151 | ) | ||||
Provision for doubtful accounts
|
40 | — | ||||||
Writedown of inventory
|
— | (123 | ) | |||||
Changes in operating assets and liabilities:
|
||||||||
Decrease in accounts receivable
|
77 | 880 | ||||||
Decrease in note receivable
|
— | 653 | ||||||
Increase in lease receivable
|
(214 | ) | — | |||||
Decrease in deposits
|
126 | 175 | ||||||
Decrease in inventory
|
1,710 | 382 | ||||||
Decrease (increase) in asset liquidation investments
|
2,077 | (807 | ) | |||||
Increase in other assets
|
(140 | ) | (6 | ) | ||||
Decrease in deferred income tax assets
|
140 | 276 | ||||||
Decrease in accounts payable and accrued liabilities
|
(1,493 | ) | (48 | ) | ||||
Increase in income taxes payable
|
165 | 100 | ||||||
Net cash provided by operating activities
|
6,260 | 3,598 | ||||||
Cash flows from investing activities:
|
||||||||
Investment in other equity accounted investments
|
(32 | ) | (286 | ) | ||||
Cash distributions from other equity accounted investments
|
2 | 292 | ||||||
Cash portion of business acquisition
|
(175 | ) | — | |||||
Net cash provided by (used in) investing activities
|
(205 | ) | 6 | |||||
Cash flows from financing activities:
|
||||||||
Proceeds from issuance of common shares, net of share issuance costs
|
1,823 | — | ||||||
Proceeds of debt payable to third parties
|
1,932 | 5,228 | ||||||
Repayment of debt payable to third parties
|
(5,503 | ) | (5,562 | ) | ||||
Proceeds of debt payable to a related party
|
864 | 1,312 | ||||||
Repayment of debt payable to a related party
|
(405 | ) | (2,819 | ) | ||||
Net cash used in financing activities
|
(1,289 | ) | (1,841 | ) | ||||
Increase in cash and cash equivalents
|
4,766 | 1,763 | ||||||
Cash and cash equivalents at beginning of period
|
2,608 | 93 | ||||||
Cash and cash equivalents at end of period
|
$ | 7,374 | $ | 1,856 | ||||
Supplemental schedule of non-cash investing and financing activities:
|
||||||||
Issuance of common stock in exchange for assets of acquired business
|
$ | 184 | $ | — | ||||
Issuance of options to purchase common stock in exchange for assets of acquired business
|
460 | — | ||||||
Supplemental cash flow information:
|
||||||||
Taxes paid
|
109 | 21 | ||||||
Interest paid
|
91 | 79 |
At June 23, 2011
|
||||
$
|
||||
Consideration
|
||||
Cash
|
175 | |||
Equity instruments:
|
||||
122,950 CRBCI common shares
|
184 | |||
230,000 options to purchase CRBCI common shares
|
460 | |||
Fair value of total consideration
|
819 | |||
Acquisition related costs (included in selling, general, and administrative expenses in CRBCI’s condensed consolidated statement of operations for the six months ended June 30, 2011)
|
41 | |||
Recognized amounts of identifiable assets acquired and liabilities assumed
|
||||
Accounts receivable
|
591 | |||
Property, plant and equipment
|
2 | |||
Goodwill
|
226 | |||
Total identifiable net assets
|
819 |
June 30,
2011
|
December 31,
2010
|
|||||||
Accounts receivable (net of allowance for doubtful accounts of $0; 2010 - $22)
|
$ | 637 | $ | 124 | ||||
Notes receivable (net of allowance for doubtful accounts of $186; 2010 - $146)
|
39 | 79 | ||||||
Lease receivable
|
214 | — | ||||||
$ | 890 | $ | 203 |
Options
|
Weighted
Average
Exercise
Price
|
|||||||
Outstanding at December 31, 2010
|
728,246 | $ | 0.89 | |||||
Granted
|
2,420,000 | $ | 1.85 | |||||
Expired
|
(6,215 | ) | $ | 8.29 | ||||
Outstanding at June 30, 2011
|
3,142,031 | $ | 1.62 | |||||
Options exercisable at June 30, 2011
|
892,031 | $ | 1.12 |
|
Options
|
Weighted
Average
Exercise
Price
|
||||||
Outstanding at December 31, 2009
|
994,027 | $ | 6.02 | |||||
Granted
|
40,000 | $ | 0.08 | |||||
Expired
|
(80,781 | ) | $ | 59.25 | ||||
Outstanding at June 30, 2010
|
953,246 | $ | 1.26 | |||||
Options exercisable at June 30, 2010
|
749,496 | $ | 1.44 |
June 30,
|
||||||||
2011
|
2010
|
|||||||
Assumed exercise of options to purchase shares of common stock
|
2,727,031 | 873,246 |
June 30,
2011
|
December 31,
2010
|
|||||||
Regulatory and legal fees
|
$ | 285 | $ | 612 | ||||
Distributions payable to former non-controlling interest
|
— | 766 | ||||||
Accounting, auditing and tax consulting
|
169 | 118 | ||||||
Due to Joint Venture partners
|
47 | 178 | ||||||
Asset liquidation expense
|
18 | — | ||||||
Customer deposits
|
25 | 313 | ||||||
Patent licensing and maintenance
|
70 | 118 | ||||||
Sales and other taxes
|
78 | 81 | ||||||
Remuneration and benefits
|
317 | 228 | ||||||
Other
|
53 | 141 | ||||||
Total accounts payable and accrued liabilities
|
$ | 1,062 | $ | 2,555 |
June 30,
2011
|
December 31,
2010
|
|||||||
Knight’s Bridge Capital Partners Internet Fund No. 1 GP LLC
|
$ | 18 | $ | 18 | ||||
Polaroid
|
2,766 | 2,688 | ||||||
Total investments
|
$ | 2,784 | $ | 2,706 |
|
·
|
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 additional investments of $54 in 2010 and $11 in 2011, the Company’s cumulative cash investment totals $493.
|
|
·
|
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. 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, $263 in 2010, and $21 in the first six months of 2011, and cash distributions of $186 and $233 in 2009 and 2010, respectively, the Company’s cumulative cash investment totals $1,967.
|
2011
|
2010
|
|||||||
Gross revenues
|
$ | 2,023 | $ | 9,985 | ||||
Gross profit
|
$ | 1,620 | $ | 3,065 | ||||
Income from continuing operations
|
$ | 1,717 | $ | 3,038 | ||||
Net income
|
$ | 1,717 | $ | 3,038 | ||||
Net income after non-controlling interest
|
$ | 1,717 | $ | 2,278 |
June 30,
2011
|
December 31,
2010
|
|||||||
Revolving credit facility
|
$ | 921 | $ | 4,485 | ||||
Related party debt
|
67 | — | ||||||
988 | 4,485 | |||||||
Less current portion
|
988 | 4,485 | ||||||
Long-term debt, less current portion
|
$ | — | $ | — |
For the Three Months Ended
|
||||||||
June 30, 2011
|
June 30, 2010
|
|||||||
Asset
Liquidation
|
Asset
Liquidation
|
|||||||
Revenues from external customers
|
$ | 11,735 | $ | 488 | ||||
Earnings of equity accounted asset liquidation investments
|
157 | 2,601 | ||||||
Other income (expense)
|
14 | (125 | ) | |||||
Interest expense
|
(52 | ) | (97 | ) | ||||
Segment income (pre-tax)
|
4,816 | 2,208 | ||||||
Investment in equity accounted asset liquidation investments
|
1,471 | 4,750 | ||||||
Segment assets
|
5,869 | 8,891 |
For the Six Months Ended
|
||||||||
June 30, 2011
|
June 30, 2010
|
|||||||
Asset
|
Asset
|
|||||||
Liquidation
|
Liquidation
|
|||||||
Revenues from external customers
|
$ | 12,469 | $ | 2,721 | ||||
Earnings from equity accounted asset liquidation investments
|
1,717 | 3,038 | ||||||
Other income (expense)
|
14 | (125 | ) | |||||
Interest expense
|
(136 | ) | (198 | ) | ||||
Segment income (pre-tax)
|
4,454 | 2,856 |
Three months
ended
June 30,
2011
|
Three months
ended
June 30,
2010
|
Six months
ended
June 30,
2011
|
Six months
ended
June 30,
2010
|
|||||||||||||
Total other income and earnings from equity accounted investments for reportable segments
|
$ | 171 | $ | 2,476 | $ | 1,731 | $ | 2,913 | ||||||||
Unallocated other income and earnings from equity investments from corporate accounts
|
35 | 73 | 50 | 151 | ||||||||||||
$ | 206 | $ | 2,549 | $ | 1,781 | $ | 3,064 | |||||||||
Total interest expense for reportable segments
|
$ | 52 | $ | 97 | $ | 136 | $ | 198 | ||||||||
Unallocated interest expense from related party debt
|
— | 35 | — | 64 | ||||||||||||
$ | 52 | $ | 132 | $ | 136 | $ | 262 | |||||||||
Total depreciation and amortization for reportable segments
|
$ | — | $ | — | $ | — | $ | — | ||||||||
Other unallocated depreciation from corporate assets
|
— | — | — | — | ||||||||||||
$ | — | $ | — | $ | — | $ | — | |||||||||
Total segment income (pre-tax)
|
$ | 4,816 | $ | 2,208 | $ | 4,454 | $ | 2,856 | ||||||||
Other income
|
35 | 73 | 50 | 151 | ||||||||||||
Other corporate expenses (primarily corporate level interest, general and administrative expenses)
|
(333 | ) | (267 | ) | (395 | ) | (547 | ) | ||||||||
Income tax expense (recovery)
|
978 | 314 | 380 | 381 | ||||||||||||
Net income from continuing operations
|
$ | 3,540 | $ | 1,700 | $ | 3,729 | $ | 2,079 | ||||||||
As at
|
As at
|
|||||||||||||||
June 30, 2011
|
June 30, 2010
|
|||||||||||||||
Segment assets
|
$ | 5,869 | $ | 8,891 | ||||||||||||
Intangible assets not allocated to segments
|
— | — | ||||||||||||||
Other assets not allocated to segments(1)
|
12,253 | 3,134 | ||||||||||||||
$ | 18,122 | $ | 12,025 |
|
(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.
|
2011
|
$82 | |||
2012
|
$159 | |||
2013
|
$154 | |||
2014
|
$141 | |||
2015
|
$148 |
|
·
|
At June 30, 2011 the Company had stockholders’ equity of $15,709, as compared to $9,448 at December 31, 2010.
|
|
·
|
The Company is 76.2% owned by Counsel. 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 the Company issued one million common shares through a private placement, representing 3.7% of the then-outstanding common shares. On June 23, in connection with its acquisition of Equity Partners, the Company issued 122,950 common shares. Counsel’s ownership thereby decreased to 76.2%, that of the Co-CEOs to 5.98% each, and that of the remaining public stockholders to 7.65%.
|
Payment due by period
|
||||||||||||||||||||
Contractual obligations:
|
Total
|
Less than 1
year
|
1-3
years
|
3-5
years
|
More than
5 years
|
|||||||||||||||
Revolving credit facility
|
$ | 962 | $ | 962 | $ | — | $ | — | $ | — | ||||||||||
Debt payable to a related party
|
67 | 67 | — | — | — | |||||||||||||||
Operating leases
|
685 | 164 | 302 | 219 | — | |||||||||||||||
Total
|
$ | 1,714 | $ | 1,193 | $ | 302 | $ | 219 | $ | — |
|
·
|
Compensation expense was $674 in the second quarter of 2011, compared to $342 in the second quarter of 2010. The primary expense in both years was salary and benefits related to Counsel RB, which were $592 in 2011 and $290 in 2010. The increase is due to the growth of Counsel RB’s operations over the past year. With respect to CRBCI’s operations, the salary earned by the President remained unchanged at $34. Stock based compensation was $48 in the second quarter of 2011 and $17 during the second quarter of 2010. This expense increased due to option grants during 2011. During the first quarter, 1,500,000 options were issued to officers and employees of the Company, and during the second quarter, 650,000 options were issued to the Company’s President and two officers of Counsel. There were no similar stock option grants during 2010.
|
|
·
|
Legal expense was $70 in the second quarter of 2011, primarily due to the stock option grants referenced above and the acquisition of Equity Partners. Legal expense was $8 in the second quarter of 2010.
|
|
·
|
Accounting and tax consulting expenses were $45 in the second quarter of 2011, compared to $37 in the second quarter of 2010.
|
|
·
|
Directors’ fees were $34 in the second quarter of 2011 and $32 in the second quarter of 2010.
|
|
·
|
Consulting expense was $93 in the second quarter of 2011 as compared to $13 in the second quarter of 2010, and related solely to the operations of Counsel RB. The increase of $80 is due to the growth of Counsel RB’s operations.
|
|
·
|
Management fees and salary allocations charged by our controlling stockholder, Counsel, were $108 in the second quarter of 2011 and $90 in the second quarter of 2010.
|
|
·
|
Uncompleted asset liquidation deal expenses were $19 in the second quarter of 2011 as compared to $1 in the second quarter of 2010. The increase is due to the growth of Counsel RB’s operations and the greater number of potential transactions.
|
|
·
|
Insurance expense, including directors and officers liability insurance expense was $24 in the second quarter of 2011 as compared to $22 in the second quarter of 2010.
|
|
·
|
Office rent was $43 in the second quarter of 2011 as compared to $22 in the second quarter of 2010, and related solely to the operations of Counsel RB. The increase of $21 is due to the growth of Counsel RB’s operations.
|
|
·
|
Franchise tax was $8 in the second quarter of 2011 as compared to $6 in the second quarter of 2010.
|
|
·
|
Travel expense was $62 in the second quarter of 2011, as compared to $21 in the second quarter of 2010. The majority of the travel related to Counsel RB’s operations, and the increase of $41 is due to the growth of those operations.
|
|
·
|
In the second quarter of 2011, the Company recorded a provision of $39 on accounts and notes receivable related to Counsel RB’s operations. There were no similar transactions during 2010.
|
|
·
|
Other income was $16 in the second quarter of 2011, as compared to other expense of $125 in the second quarter of 2010. In 2011, $12 was the refund of a retainer, and the remainder was interest income. In 2010 the expense primarily consisted of a $123 writedown of Counsel RB’s real estate inventory.
|
|
·
|
Third party interest expense was $52 in the second quarter of 2011, as compared to $97 in the second quarter of 2010. All of the expense related to the third party debt owed by Counsel RB.
|
|
·
|
Related party interest expense was $0 in the second quarter of 2011, as compared to $35 in the second quarter of 2010. All of the 2010 expense related to the Company’s loan from its parent, Counsel, which was repaid in full during the third quarter of 2010.
|
|
·
|
In the second quarter of 2011, the Company recorded income of $33 from its other equity accounted investments, as compared to income of $73 in the second quarter of 2010. In 2011 the amount consisted of $32 from Polaroid and $1 from Knight’s Bridge GP. In 2010 the income consisted of $72 from Polaroid and $1 from Knight’s Bridge GP.
|
|
·
|
Compensation expense was $1,404 in the first half of 2011, compared to $694 in the first half of 2010. The primary expense in both years was salary and benefits related to Counsel RB, which were $1,269 in 2011 and $590 in 2010. The increase is due to the growth of Counsel RB’s operations over the past year. With respect to CRBCI’s operations, the salary earned by the President remained unchanged at $69. Stock based compensation was $66 in the first half of 2011 as compared to $35 during the first half of 2010. During the first half of 2011, 1,750,000 options were issued to officers and employees of the Company, and 400,000 options were issued to officers of Counsel. There were no similar stock option grants during the first half of 2010.
|
|
·
|
Legal expense was a credit of $182 in the first half of 2011, due to negotiated reductions in fees that were billed during 2010. Legal expense was $19 in the first half of 2010.
|
|
·
|
Accounting and tax consulting expenses were $92 in the first half of 2011, compared to $70 in the first half of 2010.
|
|
·
|
Directors’ fees were $67 in the first half of 2011and $65 in the first half of 2010.
|
|
·
|
Consulting expense was $189 in the first half of 2011 as compared to $19 in the first half of 2010, and related solely to the operations of Counsel RB. The increase of $170 is due to the growth of Counsel RB’s operations.
|
|
·
|
Management fees and salary allocations charged by our controlling stockholder, Counsel, were $215 in the first half of 2011 and $180 in the first half of 2010.
|
|
·
|
Uncompleted asset liquidation deal expenses were $45 in the first half of 2011 as compared to $5 in the first half of 2010. The increase is due to the growth of Counsel RB’s operations and the greater number of potential transactions.
|
|
·
|
Insurance expense, including directors and officers liability insurance expense was $46 in the first half of 2011 as compared to $42 in the first half of 2010.
|
|
·
|
Office rent was $91 in the first half of 2011 as compared to $44 in the first half of 2010, and related solely to the operations of Counsel RB. The increase of $47 is due to the growth of Counsel RB’s operations.
|
|
·
|
Franchise tax was $30 in the first half of 2011 as compared to $23 in the first half of 2010.
|
|
·
|
Travel expense was $109 in the first half of 2011, as compared to $28 in the first half of 2010. The majority of the travel related to Counsel RB’s operations, and the increase of $81 is due to the growth of those operations.
|
|
·
|
In the second quarter of 2011, the Company recorded a provision of $39 on accounts and notes receivable related to Counsel RB’s operations. There were no similar transactions during 2010.
|
|
·
|
Other income was $16 in the first half of 2011, as compared to other expense of $125 in the first half of 2010. In 2011, $12 was the refund of retainer, and the remainder was interest income. In 2010 the expense primarily consisted of a $123 writedown of Counsel RB’s real estate inventory.
|
|
·
|
Third party interest expense was $136 in the first half of 2011, as compared to $198 in the first half of 2010. All of the expense related to the third party debt owed by Counsel RB.
|
|
·
|
Related party interest expense was $0 in the first half of 2011, as compared to $64 in the first half of 2010. All of the 2010 expense related to the Company’s loan from its parent, Counsel, which was repaid in full during the third quarter of 2010.
|
|
·
|
In the first half of 2011, the Company recorded income of $48 from its other equity accounted investments, as compared to income of $151 in the first half of 2010. In 2011 the income consisted of $46 from Polaroid and $2 from Knight’s Bridge GP. In 2010 the income consisted of $148 from Polaroid and $3 from Knight’s Bridge GP.
|
Exhibit No.
|
Identification of Exhibit
|
||
10.1
|
Asset Purchase Agreement among EP USA, LLC (as Company), Equity Partners, Inc. of Maryland, The Rexford Company, LLC and Cross Concepts, LLC (as Sellers) and Equity Partners CRB LLC (as Buyer), dated June 23, 2011.
|
||
10.2
|
Put Option Agreement between Counsel RB Capital Inc. and The Rexford Company, LLC, dated June 23, 2011.
|
||
10.3
|
Lock-Up Agreement among Counsel RB Capital Inc., Kenneth Mann and Equity Partners, Inc., dated June 23, 2011.
|
||
10.4
|
Promissory Note for $66,544.13 dated June 30, 2011 between Counsel RB Capital Inc. and Counsel Corporation.
|
||
31.1
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) as adopted under Section 302 of the Sarbanes-Oxley Act of 2002
|
||
31.2
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) as adopted under Section 302 of the Sarbanes-Oxley Act of 2002 | ||
32.1
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
32.2
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
101.INS**
|
XBRL Instance Document | ||
101.SCH**
|
XBRL Taxonomy Extension Schema | ||
101.CAL**
|
XBRL Taxonomy Extension Calculation Linkbase | ||
101.DEF**
|
XBRL Taxonomy Extension Definition Linkbase | ||
101.LAB**
|
XBRL Taxonomy Extension Label Linkbase | ||
101.PRE**
|
XBRL Taxonomy Extension Presentation Linkbase |
Counsel RB Capital Inc.
|
||
Date: August 15, 2011
|
By:
|
/s/ Allan C. Silber
|
Allan C. Silber
|
||
Chairman of the Board and President
|
||
(Principal Executive Officer)
|
||
Date: August 15, 2011
|
By:
|
/s/ Stephen A. Weintraub
|
Stephen A. Weintraub
|
||
Chief Financial Officer and Corporate Secretary
|
||
(Principal Financial Officer)
|
1.
|
SALE OF ASSETS
|
1
|
|
1.1
|
Sale of the Assets
|
1
|
|
1.2
|
Excluded Assets
|
2
|
|
1.3
|
Liabilities
|
2
|
|
1.4
|
Purchase Price
|
2
|
|
2.
|
CLOSING
|
3
|
|
2.1
|
Closing
|
3
|
|
2.2
|
Actions of Company, Sellers and Owners at Closing
|
3
|
|
2.3
|
Actions of Buyer at Closing
|
4
|
|
3.
|
REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY
|
4
|
|
3.1
|
Organization
|
4
|
|
3.2
|
Powers; Consents; Absence of Conflicts With Other Agreements, Etc
|
5
|
|
3.3
|
Binding Agreement
|
5
|
|
3.4
|
Compliance With Laws; Permits
|
5
|
|
3.5
|
Property
|
6
|
|
3.6
|
Litigation or Proceedings
|
6
|
|
3.7
|
Environmental Matters
|
7
|
|
3.8
|
Taxes
|
7
|
|
3.9
|
Employee Relations
|
8
|
|
3.10
|
Employee Benefit Matters
|
8
|
|
3.11
|
Contracts
|
8
|
|
3.12
|
Inventory
|
9
|
|
3.13
|
Insurance
|
9
|
|
3.14
|
Books and Records
|
9
|
|
3.15
|
Broker’s or Finder’s Fees
|
9
|
|
3.16
|
No Undisclosed Liabilities
|
9
|
|
3.17
|
Intellectual Property
|
9
|
|
3.18
|
No Misleading Statements
|
10
|
|
3.19
|
Operations
|
10
|
|
4.
|
REPRESENTATIONS AND WARRANTIES REGARDING SELLERS
|
10
|
|
4.1
|
Authorization
|
10
|
|
4.2
|
No Violations
|
11
|
|
4.3
|
Brokers, Finders and Investment Bankers
|
11
|
|
4.4
|
Ownership
|
11
|
|
5.
|
REPRESENTATIONS AND WARRANTIES OF BUYER
|
11
|
|
5.1
|
Organization
|
11
|
|
5.2
|
Powers; Consents; Absence of Conflicts With Other Agreements, Etc
|
11
|
|
5.3
|
Binding Agreement
|
12
|
|
5.4
|
Proceedings
|
12
|
|
5.5
|
No Brokers
|
12
|
6.
|
REPRESENTATIONS AND WARRANTIES REGARDING PARENT
|
12
|
|
6.1
|
Incorporation; Authorization
|
12
|
|
6.2
|
Capitalization; Structure
|
13
|
|
6.3
|
Litigation
|
13
|
|
6.4
|
SEC Reports; Material Adverse Effect
|
13
|
|
6.5
|
Disclosure
|
13
|
|
7.
|
REPRESENTATIONS AND WARRANTIES OF INVESTORS
|
13
|
|
7.1
|
Access
|
14
|
|
7.2
|
Investment Intent
|
14
|
|
7.3
|
Ability to Bear Economic Loss
|
14
|
|
7.4
|
Independent Investigations
|
14
|
|
7.5
|
Accredited Investor
|
14
|
|
7.6
|
State of Domicile
|
14
|
|
8.
|
COVENANTS |
14
|
|
8.1
|
Tax Matters.
|
14
|
|
8.2
|
Sales Tax
|
15
|
|
8.3
|
Prorations
|
15
|
|
8.4
|
Confidentiality
|
16
|
|
8.5
|
Winding Up
|
16
|
|
8.6
|
Assignment of Name Under Certain Conditions
|
16
|
|
9.
|
MISCELLANEOUS
|
16
|
|
9.1
|
Definitions
|
16
|
|
9.2
|
Additional Assurances
|
21
|
|
9.3
|
Cost of Transaction
|
21
|
|
9.4
|
Choice of Law; Venue
|
21
|
|
9.5
|
Waiver of Jury Trial
|
21
|
|
9.6
|
Enforcement of Agreement
|
21
|
|
9.7
|
Survival
|
21
|
|
9.8
|
Notice
|
21
|
|
9.9
|
Benefit/Assignment
|
22
|
|
9.10
|
Third Party Beneficiaries
|
22
|
|
9.11
|
Waiver of Breach
|
23
|
|
9.12
|
Interpretation
|
23
|
|
9.13
|
Tax Advice and Reliance
|
23
|
|
9.14
|
Severability
|
23
|
|
9.15
|
Gender and Number
|
23
|
|
9.16
|
Divisions and Headings
|
23
|
|
9.17
|
Entire Agreement
|
23
|
|
9.18
|
Amendment
|
23
|
|
9.19
|
Counterparts
|
23
|
Equity Partners
|
101N. West St.
|
|
or Mann:
|
Easton, MD 21601
|
|
Rexford Company:
|
|
|
or Rexford:
|
|
|
|
||
|
||
Cross Concepts or Cross:
|
|
|
|
||
|
||
|
||
Buyer:
|
Jonathan Reich
|
|
Counsel RB Capital LLC
|
||
267 Central Avenue
|
||
White Plains, NY 10606
|
||
With a
|
Adam Levy
|
|
simultaneous
|
Counsel Corporation
|
|
copy to:
|
1 Toronto Street, Suite 700
|
|
P.O. Box 3
|
||
Toronto, ON M5C 2V6, Canada
|
||
and
|
||
Curtis Capeling
|
||
Harwell Howard Hyne Gabbert & Manner, P.C.
|
||
315 Deaderick Street, Suite 1800
|
||
Nashville, TN 37238
|
COMPANY:
|
|
EP USA, LLC
|
|
By:
|
|
Name:
|
|
Title:
|
|
SELLERS:
|
|
EQUITY PARTNERS, INC. OF MARYLAND
|
|
By:
|
|
Name:
|
|
Title:
|
|
THE REXFORD COMPANY, LLC
|
|
By:
|
|
Name:
|
|
Title:
|
|
CROSS CONCEPTS, LLC
|
|
By:
|
|
Name:
|
|
Title:
|
|
OWNERS:
|
|
|
|
Ken Mann
|
|
|
|
Dan Rexford
|
|
|
|
Fred Cross
|
BUYER:
|
|
EQUITY PARTNERS CRB LLC
|
|
By:
|
|
Jonathan Reich, Co-CEO
|
To the Corporation:
|
Counsel RB Capital Inc.
|
Attn: Jonathan Reich
|
267 Central Avenue
|
White Plains, New York 10606
|
Phone: 914.614.1800
|
With a copy to:
|
Counsel Corporation
|
Attn: R. Adam Levy
|
1 Toronto Street, Suite 700
|
Toronto ON M5C 2V6
|
Canada
|
Phone: 416.866.3000
|
and
|
Harwell Howard Hyne Gabbert & Manner, P.C.
|
Attn: Curtis Capeling
|
315 Deaderick Street, Suite 1800
|
Nashville, Tennessee 37238
|
Phone: 615.256.0500
|
Fax: 615-251-1059
|
To Optionee:
|
The Rexford Company, LLC
|
Attn: Dan Rexford
|
Address:
|
Phone:
|
Fax:
|
CORPORATION:
|
|
COUNSEL RB CAPITAL INC.
|
|
By:
|
|
Name:
|
|
Title:
|
|
OPTIONEE:
|
|
THE REXFORD COMPANY, LLC
|
|
By:
|
|
Name:
|
|
Title:
|
|
Counsel RB Capital Inc.
|
|
By:
|
|
Title:
|
|
Equity Partners, Inc. of Maryland
|
|
By:
|
|
Name: Kenneth W. Mann
|
|
Title: President
|
|
Kenneth W. Mann
|
|
|
$66,544.13
|
June 30, 2011
|
COUNSEL RB CAPITAL INC.
|
|
By:
|
|
Name:
|
|
Title:
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q 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 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:
|
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:
|
|
(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 Quarterly Report on Form 10-Q 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 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:
|
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:
|
|
(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
|
|
Chief Financial Officer and Corporate Secretary
(Principal Financial Officer)
|
1.
|
The Report is in full compliance with reporting requirements of Section 13(a) or 15(d) 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 operations of the Corporation.
|
August 15, 2011
|
/s/ Allan C. Silber
|
Allan C. Silber
|
Chairman of the Board and President
|
1.
|
The Report is in full compliance with reporting requirements of Section 13(a) or 15(d) 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 operations of the Corporation.
|
August 15, 2011
|
/s/ Stephen A. Weintraub
|
Stephen A. Weintraub
|
Chief Financial Officer and Corporate Secretary
|
CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $)
In Thousands, except Share data |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Allowance for doubtful accounts (in thousands of dollars) | $ 186 | $ 168 |
Preferred stock, par value (in thousands of dollars) | $ 10.00 | $ 10.00 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 27,083,030 | 25,960,080 |
Common stock, shares outstanding | 27,083,030 | 25,960,080 |
Convertible Preferred stock Class N
|
 |  |
Preferred stock, par value (in thousands of dollars) | $ 10.00 | $ 10.00 |
Preferred stock, shares issued | 592 | 592 |
Preferred stock, shares outstanding | 592 | 592 |
Preferred stock, liquidation preference (in dollars) | $ 592 | $ 592 |
DOCUMENT AND ENTITY INFORMATION
|
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Aug. 08, 2011
|
|
Entity Registrant Name | Counsel RB Capital Inc. | Â |
Entity Central Index Key | 0000849145 | Â |
Current Fiscal Year End Date | --12-31 | Â |
Entity Filer Category | Non-accelerated Filer | Â |
Trading Symbol | crbn | Â |
Entity Common Stock, Shares Outstanding | Â | 27,083,030 |
Document Type | 10-Q | Â |
Amendment Flag | false | Â |
Document Period End Date | Jun. 30, 2011 | |
Document Fiscal Period Focus | Q2 | Â |
Document Fiscal Year Focus | 2011 | Â |
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Stock-based Compensation
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
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Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | Note 5 – Stock-based Compensation At June 30, 2011 the Company had six stock-based compensation plans, which are described more fully in Note 14 to the audited consolidated financial statements contained in the Company’s most recently filed Annual Report on Form 10-K. The Company’s total compensation cost related to stock options is $48 and $66 for the three and six months ended June 30, 2011, respectively, as compared to $17 and $35 for the three and six months ended June 30, 2010. The increase in 2011 is due to options granted to employees and officers of both the Company and Counsel, as detailed below. The fair value compensation costs of unvested stock options in the first six months of 2011 and 2010 were determined using the Black-Scholes Option Pricing Model for grant dates between 2006 and 2011. Historical inputs to the model included expected volatility between 79% and 323%, risk-free interest rates between 0.94% and 5.07%, expected lives of 4.75 or 6.25 years, and an expected dividend yield of zero. The Company’s estimated forfeiture rate of its stock options is nil. No tax benefit from stock-based compensation was recognized in the first six months of either 2011 or 2010, as no options were exercised. The Company’s stock-based compensation had no effect on its cash flows during either period. During the first quarter of 2011, as detailed in the Company’s Report on Form 10-Q for the quarter ended March 31, 2011, as filed with the SEC, the Company issued a total of 1,540,000 options to officers, employees and directors. On June 23, 2011, 230,000 options, having an exercise price of $1.83 and a fair value of $1.9992, were granted to the previous owners of Equity Partners as part of the consideration for the acquisition of Equity Partners. These options are part of the 2003 Stock Options and Appreciation Rights Plan. The inputs to the Black-Scholes Option Pricing Model were an expected volatility of 323%, a risk-free interest rate of 0.94%, an expected term of 4.75 years, and an expected dividend yield of zero. No similar grants were made during the first six months of 2010. On June 29, 2011, 250,000 options were granted to the President of CRBCI, and an additional 400,000 options were granted to officers of Counsel. These options are part of the 2003 Stock Options and Appreciation Rights Plan. The options have an exercise price of $1.974 and a Black-Scholes fair value of $2.10. The inputs to the Black-Scholes Option Pricing Model were an expected volatility of 323%, a risk-free interest rate of 0.94%, an expected term of 4.75 years, and an expected dividend yield of zero. No similar grants were made during the first six months of 2010 The following summarizes the changes in common stock options for the six months ended June 30, 2011 and 2010, respectively:
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Patent Participation Fee
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Jun. 30, 2011
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Patent Participation Fee [Abstract] | Â |
Intangible Assets Disclosure [Text Block] | Note 10 – Patent Participation Fee In the fourth quarter of 2003, CRBCI acquired a VoIP patent from a third party. Consideration provided was $100 plus a 35% residual payable to the third party relating to the net proceeds from future licensing and/or enforcement actions from the CRBCI VoIP patent portfolio. Net proceeds are defined as amounts collected from third parties net of the direct costs associated with putting the licensing or enforcement in place and related collection costs. |
Basis of Presentation
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Jun. 30, 2011
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | Â |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Note 1 –Basis of Presentation These unaudited condensed consolidated financial statements include the accounts of Counsel RB Capital Inc. together with its subsidiaries, including Counsel RB Capital LLC (“Counsel RB”), Equity Partners CRB LLC, C2 Communications Technologies Inc., and C2 Investments Inc. These entities, collectively, are referred to as “CRBCI”, the “Company”, “we” or “our” in these financial statements. Our unaudited condensed consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) as outlined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and include the assets, liabilities, revenues, and expenses of all subsidiaries over which CRBCI exercises control. All significant intercompany accounts and transactions have been eliminated upon consolidation. We have prepared the condensed consolidated financial statements included herein, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In our opinion, these financial statements reflect all adjustments that are necessary to present fairly the results for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations; however, we believe that the disclosures are appropriate. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2010, filed with the Securities and Exchange Commission on March 31, 2011. Certain items in the condensed consolidated statement of operations and comprehensive income for the six months ended June 30, 2010 have been reclassified to conform to current year presentation. These changes had no effect on previously reported net income and comprehensive income, or stockholders’ equity. The results of operations for the six-month period ended June 30, 2011 are not necessarily indicative of those operating results to be expected for any subsequent interim period or for the entire year ending December 31, 2011. |
Composition of Certain Financial Statements Captions
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Composition Of Certain Financial Statements Captions [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Composition Of Certain Financial Statements Captions [Text Block] | Note 7 – Composition of Certain Financial Statement Items Accounts payable and accrued liabilities Accounts payable and accrued liabilities consisted of the following at June 30, 2011 and December 31, 2010:
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Related Party Transactions
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Jun. 30, 2011
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Related Party Transactions [Abstract] | Â |
Related Party Transactions Disclosure [Text Block] | Note 12 – Related Party Transactions Transactions with Counsel At June 30, 2011 the Company had debt owing to Counsel in the amount of $67, as compared to a amount receivable from Counsel of $392 at December 31, 2010. The loan was advanced pursuant to an existing demand loan facility (the “Counsel Loan”). The Counsel Loan, which was originally entered into during the fourth quarter of 2003, accrues interest at 10% per annum compounded quarterly from the date funds are advanced. The Counsel Loan has been amended several times, most recently during the second quarter of 2009 when it was converted into a demand loan. The Counsel Loan is secured by the assets of the Company and is subject to certain events of default. Counsel Management Services Since December 2004, CRBCI and Counsel have entered into successive annual management services agreements (the “Agreement”). Under the terms of the Agreement, CRBCI agrees to pay Counsel for ongoing services provided to CRBCI by Counsel personnel. The basis for such services charged is an allocation, based on time incurred, of the cost of the base compensation paid by Counsel to those employees providing services to CRBCI. The amounts due under the Agreement are payable within 30 days following the respective year end, subject to applicable restrictions. Any unpaid fee amounts bear interest at 10% per annum commencing on the day after such year end. In the event of a change of control, merger or similar event of CRBCI, all amounts owing, including fees incurred up to the date of the event, will become due and payable immediately upon the occurrence of such event. For the six months ended June 30, 2011 and 2010, the amount charged to the Company pursuant to the Agreement was $180. In addition, during the six months ended June 30, 2011, $35 was charged to the Company for Counsel services relating to the operations of Counsel RB. There was no similar charge in 2010. Transactions with Other Related Parties The Company leases office space in White Plains, NY, as part of the operations of Counsel RB. The building is owned by an entity that is owned by a Co-CEO of Counsel RB and the Company. During the first six months of 2011 and 2010, the Company paid rent of $70 and $40, respectively, to the entity. |
Investments
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Equity Method Investments and Joint Ventures [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in and Advances to Affiliates [Text Block] | Note 8 – Investments The Company’s investments as at June 30, 2011 and December 31, 2010 consisted of the following:
Knight’s Bridge Capital Partners Internet Fund No. 1 GP LLC (“Knight’s Bridge GP”) The Company accounts for its investment under the equity method. For the year ended December 31, 2010, the Company recorded $17 as its share of Knight’s Bridge GP’s earnings, and received cash distributions of $17. During the first six months of 2011, the Company recorded $2 as its share of Knight’s Bridge GP’s earnings, and received $2 of cash distributions. Based on the Company’s analysis of Knight’s Bridge GP’s financial statements and projections as at June 30, 2011, the Company concluded that there has been no other than temporary impairment in the fair value of its investment, and that its book value is the best estimate of its fair value. Polaroid In the second quarter of 2009, the Company invested $2,621 to indirectly acquire an approximate 5% interest in Polaroid Corporation, pursuant to a Chapter 11 reorganization in a U.S. bankruptcy court. The investment was made as part of a joint venture investor group (the “JV Group”) that includes both related parties and non-related parties. The JV Group formed two operating companies (collectively, “Polaroid”) to hold the acquired intellectual property (PLR IP Holdings, LLC) and inventory (PLR Acquisition, LLC). The Company, the related parties and two of the unrelated parties formed KPL, LLC (“KPL” or the “LLC”) to pool their individual investments in Polaroid. The pooled investments totalled approximately $19 million of the aggregate purchase price of approximately $55 million. KPL is managed by a related party, Knight’s Bridge Capital Partners Management, L.P. (the “Management LP”), who acts as the General Partner of the LLC. The Management LP is a wholly-owned subsidiary of the Company’s majority shareholder, Counsel Corporation (together with its subsidiaries, “Counsel”). The Company’s investment in the LLC has two components:
The Company accounts for its investments in the LLC under the equity method. For the years ended December 31, 2009 and 2010, the Company recorded $246 and $14, respectively, as its share of earnings. During the first six months of 2011, the Company recorded $46 as its share of the LLC’s earnings (2010 - $148). At December 31, 2010, the Company used a discounted cash flow methodology to estimate that its investment in Polaroid had a fair value of approximately $3,348. The Company has concluded, based on Polaroid’s operating results for the first six months of 2011, and projections for future quarters, that there has been no material change to the estimated fair value. Summarized financial information – Equity accounted asset liquidation investments The table below details the results of operations, for the six months ended June 30, 2011 and 2010, attributable to CRBCI from the Joint Ventures in which it was invested during those periods.
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Earning (Loss) Per Share
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Earnings Per Share [Abstract] | Â | ||||||||||||||||||||||||||||||||||||
Earnings Per Share [Text Block] | Note 6 – Earning (Loss) Per Share The Company is required, in periods in which it has net income, to calculate basic earnings per share (“basic EPS”) using the two-class method. The two-class method is required because the Company’s Class N preferred shares, each of which is convertible to 40 common shares, have the right to receive dividends or dividend equivalents should the Company declare dividends on its common stock. Under the two-class method, earnings for the period, net of any deductions for contractual preferred stock dividends and any earnings actually distributed during the period, are allocated on a pro-rata basis to the common and preferred stockholders. The weighted-average number of common and preferred shares outstanding during the period is then used to calculate basic EPS for each class of shares. In periods in which the Company has a net loss, basic loss per share is calculated by dividing the loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. The two-class method is not used, because the preferred stock does not participate in losses. Options, warrants and convertible debt are included in the calculation of diluted earnings per share, since the instruments are assumed to be exercised or converted, except when their effect would be anti-dilutive. For the both the three and six months ended June 30, 2011 and 2010, the net effect of including the Company’s potential common shares did not change the EPS amount, and therefore diluted EPS equals basic EPS. Potential common shares that were not included in the computation of earnings (loss) per share because they would have been anti-dilutive are as follows:
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Acquisition of EP USA, LLC
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Business Combinations [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination Disclosure [Text Block] | Note 2 –Acquisition of EP USA, LLC On June 23, 2011, Counsel RB, through its wholly-owned subsidiary Equity Partners CRB LLC (“CRB”), acquired 100% of the business of EP USA, LLC (d/b/a Equity Partners) (“Equity Partners”), a boutique investment banking firm and leading provider of financial solutions for distressed businesses and properties. The acquisition of Equity Partners is consistent with CRBCI’s strategy to significantly expand and diversify the services provided by Counsel RB. In connection with the acquisition, CRBCI entered into employment and consulting agreements with the previous owners and employees of Equity Partners. The cost of the acquisition was satisfied by the payment of $175 in cash, the issuance of 122,950 CRBCI common shares valued at $1.50 per share and the granting of options to purchase 230,000 CRBCI common shares with a fair value of $1.9992 per option. Additionally, one of the previous owners was issued a put option from CRBCI that will mature in September 2011, and another entered into a lock-up agreement with respect to his shares and options that will expire in 2013. The acquisition included other terms and conditions that are customary for agreements of this nature. Copies of the asset purchase agreement, the put option agreement and the lock-up agreement are attached as exhibits to this Quarterly Report on Form 10-Q. The following table summarizes the consideration paid for Equity Partners and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date:
The fair value of the 122,950 CRBCI common shares issued as part of the consideration was determined using the closing price of the shares on June 22, 2011. The fair value of the 230,000 options to purchase CRBCI common shares was determined using the Black-Scholes Option Pricing Model. Inputs to the model included an expected volatility of 323%, a risk-free interest rate of 0.94%, an expected life of 4.75 years, and an expected dividend yield of zero. The fair value of the accounts receivable is the value as reported in the above table, and includes an allowance of $0. The fair value of the goodwill, as reported above, is provisional pending final determination of the valuation of the assets. The only transactions recognized separately from the acquisition were approximately $41 of professional fees incurred by the Company, which were expensed in the period. |
Summary of Significant Accounting Policies
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6 Months Ended |
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Jun. 30, 2011
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Accounting Policies [Abstract] | Â |
Significant Accounting Policies [Text Block] | Note 3 – Summary of Significant Accounting Policies Use of estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Management bases its estimates and judgments on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. Significant estimates include the assessment of collectability of revenue recognized, amounts receivable valuation, inventory valuation, investment valuation, valuation of assets acquired, valuation of deferred income tax assets, valuation of goodwill, liabilities, and stock-based compensation. These estimates have the potential to significantly impact our consolidated financial statements, either because of the significance of the financial statement item to which they relate, or because they require judgment and estimation due to the uncertainty involved in measuring, at a specific point in time, events that are continuous in nature. The critical accounting policies used in the preparation of our audited consolidated financial statements are discussed in our Annual Report on Form 10-K for the year ended December 31, 2010. There have been no changes to these policies in the first six months of 2011. Recent Accounting Pronouncements In July 2010, the FASB issued Accounting Standards Update 2010-20, Receivables (“ASU 2010-20”). ASU 2010-20 amends an entity’s disclosures about its receivables by requiring more detailed and disaggregated disclosures about the credit quality of an entity’s financing receivables and its allowance for credit losses. Financing receivables are defined as contractual rights to receive money on demand or on fixed or determinable dates, which rights are recognized as an asset in the entity’s statement of financial position. The objective is to improve financial statement users’ understanding of 1) the nature of the credit risk associated with an entity’s financing receivables, and 2) the entity’s assessment of that risk in estimating its allowance for credit losses as well as changes in the allowance and the reasons for those changes. For information as of the end of a reporting period, ASU 2010-20 is effective for the first interim or annual reporting period ending on or after December 15, 2010. For information about activity during a reporting period, ASU 2010-20 is effective for the first interim or annual reporting period beginning after December 15, 2010. The Company has therefore included the disclosures required by ASU 2010-20 in Note 4. Future Accounting Pronouncements In April 2011, the FASB issued Accounting Standards Update 2011-02, A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring (“ASU 2011-02”). ASU 2011-02 clarifies when a loan modification or restructuring is considered a troubled debt restructuring, and was issued due to the FASB’s belief that the complexity of the evaluation, together with the increased volume of loan modifications, required additional clarification. ASU 2011-02 is effective for the first interim or annual reporting period beginning on or after June 15, 2011. It must be applied retrospectively to modifications occurring at or right after the beginning of the annual period of adoption. The Company is currently evaluating the impact of adopting ASU 2011-04. In May 2011, the FASB issued Accounting Standards Update 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU
2011-04”). ASU 2011-04 results from joint efforts by the FASB and the International Accounting Standards Board (“IASB”) to develop converged guidance on how to measure fair value and what disclosures to provide about fair value measurements. Although ASU 2011-04 is largely consistent with the existing US GAAP fair value measurement principles, it expands existing disclosure requirements and makes other amendments. ASU 2011-04 is effective for interim or annual reporting periods ending on or after December 15, 2011, with early adoption not permitted. The Company is currently evaluating the impact of adopting ASU 2011-04. In June 2011, the FASB issued Accounting Standards Update 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”). ASU 2011-05 revises the manner in which entities present comprehensive income in their financial statements, by removing the existing presentation options under US GAAP and requiring entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. Under the two-statement approach, the first statement would include components of net income, which is consistent with the income statement format used today, and the second statement would include components of other comprehensive income (“OCI”). ASU 2011-05 does not change the items that must be reported in OCI. ASU 2011-05 is effective for interim or annual reporting periods beginning after December 15, 2011, with early adoption permitted. The guidance must be applied retrospectively for all periods presented in the financial statements. The Company is currently evaluating the impact of adopting ASU 2011-05. |
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Income Taxes
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6 Months Ended |
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Jun. 30, 2011
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Income Tax Disclosure [Abstract] | Â |
Income Tax Disclosure [Text Block] | Note 11 – Income Taxes In the second quarter of 2011, the Company recognized a current income tax expense of $275 and a deferred income tax expense of $703, increasing the aggregate current income tax expense and deferred income tax expense for the six months ended June 30, 2011 to $240 and $140, respectively. The net deferred income tax expense in the second quarter of 2011 is primarily due to the realization of the tax effect of previously recorded deferred tax assets. The remaining $2,088 net deferred income tax asset balance at June 30, 2011 reflects the tax benefit of available tax losses considered “more likely than not” to be utilized during the remainder of 2011 and first six months of 2012. The Company recognized a current income tax expense of $106 and a deferred income tax expense of $275 in the six months ended June 30, 2010. As at June 30, 2011, the unrecognized tax benefit determined pursuant to the Topic 740 of the ASC, Income Taxes, is $12,059. There has been no change in the second quarter of 2011 in the estimate of the balance of unrecognized tax benefits previously determined. In the unlikely event that these tax benefits are recognized in the future, there should be no impact on the Company’s effective tax rate, unless recognition occurs at a time when all of the Company’s historic tax loss carryforwards have been utilized and the associated valuation allowance against the Company’s deferred tax assets has been reversed. In such circumstances, the amount recognized at that time should result in a reduction in the Company’s effective tax rate. The Company’s policy is to recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense. Because the Company has tax loss carryforwards in excess of the unrecognized tax benefits, the Company did not accrue for interest and penalties related to unrecognized tax benefits either upon the initial derecognition of uncertain tax positions or in the current period. It is possible that the total amount of the Company’s unrecognized tax benefits will significantly increase or decrease within the next 12 months. These changes may be the result of future audits, the application of “change in ownership” rules leading to further restrictions in tax losses arising from changes in the capital structure of the Company and/or that of its parent company Counsel, reductions in available tax loss carryforwards through future merger, acquisition and/or disposition transactions, failure to continue a significant level of business activities, or other circumstances not known to management at this time. At this time, an estimate of the range of reasonably possible outcomes cannot be made. The Company incurred annual tax losses from 1991 through 2005. All loss taxation years remain open for audit pending the application of the respective tax losses against income in a subsequent taxation year. In general, the statute of limitations expires three years from the date that a company files a tax return applying prior year tax loss carryforwards against income for tax purposes in the later year. The Company applied historic tax loss carryforwards to offset debt forgiveness in 2006 and income for tax purposes in 2008 and in 2010, respectively. The 2007 through 2010 taxation years remain open for audit. The Company’s estimated remaining federal tax loss carryforwards at June 30, 2011 are comprised of approximately $54,500 of unrestricted net operating tax losses, $28,400 of restricted net operating tax losses subject to an annual usage restriction of $2,500 per annum until 2008 and $1,700 per annum thereafter, and $400 of unrestricted capital losses. The unrestricted capital loss will expire at the end of 2011. The Company is subject to state income tax in multiple jurisdictions. While the Company had net operating loss carryforwards for state income tax purposes in certain states where it previously conducted business, its available state tax loss carryforwards may differ substantially by jurisdiction and, in general, are subject to the same or similar
restrictions as to expiry and usage described above. In addition, in certain states the Company’s state tax loss carryforwards that were attributable to certain legacy businesses sold in prior years ceased to be available to the Company following their sale. Therefore, it is possible that the Company may not have tax loss carryforwards available to shield future income which is attributable to a particular state from being subject to tax in that particular state. |
Amounts Receivable
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Receivables [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Note 4 – Amounts Receivable The Company’s amounts receivable are primarily related to the operations of Counsel RB and its subsidiary, Equity Partners. They are composed of both amounts receivable assumed by Counsel RB as a component of an asset acquisition, and amounts receivable resulting from asset sales or from services provided by Counsel RB personnel. The initial value of an amount receivable corresponds to the fair value of the underlying goods or services. To date all receivables have been classified as current, and due to their short-term nature, any decline in fair value would be due to issues involving collectability. At each financial statement date the collectability of each outstanding amount receivable is evaluated, and an allowance is recorded if the book value exceeds the amount that is deemed collectable. Collectability is determined on the basis of payment history. To date the Company has recorded only one interest-bearing note receivable, in the amount of $225. This note was acquired when Counsel RB commenced operations in the second quarter of 2009. It is in default and on non-accrual status. An allowance of $146 was recorded in the fourth quarter of 2010, and a further allowance of $40 was recorded in the second quarter of 2011. Therefore the Company’s recorded investment in financing receivables on non-accrual status is $39 at June 30, 2011. At this time, the Company does not expect to collect interest on this note and therefore does not anticipate that it will resume accruing interest receivable. In the first quarter of 2011, the Company acquired a lease receivable in the amount of $248, which is being reduced by monthly payments of $12 that began in April. The lease receivable began accruing interest on April 1, 2011. At June 30, 2011 the Company has no investment in non-interest bearing financing receivables that are past due. The Company’s single past due receivable, which had a balance of $5 at March 31, 2011, was paid in full during the second quarter. Counsel RB’s amounts receivable consist of three major categories: receivables from Joint Venture partners, receivables from asset sales, and fees and retainers relating to the business of Equity Partners. To date, the Company has not experienced any significant collectability issues with respect to either the receivables from Joint Venture partners or the receivables from asset sales. Given this experience, together with the ongoing business relationships between the Company and its partners, the Company has not yet been required to develop a policy for formal credit quality assessment The Equity Partners business has similarly not required formal credit quality assessments.. As the Company’s asset liquidation business continues to develop, more comprehensive credit assessments may be required. During the first six months of 2011, there were no changes in the Company’s accounting policies for financing receivables, and therefore no related change in the current-period provision for credit losses. During the same period, there were no purchases, sales or reclassifications of financing receivables. There were no troubled debt restructurings during the first six months of 2011. Amounts receivable consisted of the following at June 30, 2011 and December 31, 2010:
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Commitments and Contingencies
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Commitments and Contingencies Disclosure [Abstract] | Â | |||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Text Block] | Note 14 – Commitments and Contingencies At June 30, 2011, CRBCI has no commitments other than its accounts payable and accrued liabilities, the Unused Line Fee on its third party debt, and the leases on its offices in New York, California and Maryland, which expire on December 31, 2015, September 30, 2013 and April 30, 2012, respectively. The Company’s only contingency is the put option agreement that was entered into in connection with the acquisition of Equity Partners, which expires on September 12, 2011, and which the Company does not expect to be exercised. The annual lease obligations are as shown below:
In the normal course of its business, CRBCI may be subject to contingent liabilities with respect to assets sold either directly or through Joint Ventures. At June 30, 2011 CRBCI does not expect any of these liabilities, individually or in the aggregate, to have a material adverse effect on its assets or operations. The Company is involved in various other legal matters arising out of its operations in the normal course of business, none of which are expected, individually or in the aggregate, to have a material adverse effect on the
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME [Parenthetical] (USD $)
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Tax on Earnings (loss) of other equity accounted investments | $ 0 | $ 0 | $ 0 | $ 0 |
Subsequent Events
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Subsequent Events [Abstract] | Â |
Subsequent Events [Text Block] | Note 15 – Subsequent Events The Company has evaluated events subsequent to June 30, 2011 for disclosure. There have been no material subsequent events requiring disclosure in this Report. |
Debt
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Debt Disclosure [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Text Block] | Note 9 – Debt
Revolving
credit facility Counsel RB has a revolving credit facility (the “Credit Facility”) with a U.S. bank under the terms and provisions of a certain Loan and Security Agreement, dated as of June 2, 2009 (the “Loan Agreement”) and most recently amended as of March 1, 2011, in order to finance the acquisition of eligible property and equipment for purposes of resale. The Credit Facility bears interest at the greater of prime rate + 1.0% or 4.5%, and the maximum borrowing available under the Credit Facility is US $10,000, subject to Counsel RB maintaining a 1:2 ratio of capital funds, i.e. the sum of Counsel RB’s tangible net worth plus subordinated indebtedness, as defined in the Loan Agreement, to the outstanding balance. The amount of any advance is determined based upon the value of the eligible assets being acquired, which serve as collateral. Effective March 1, 2011, a monthly fee is payable with respect to unused borrowing (“Unused Line Fee”). The Unused Line Fee is equal to the product of 0.50% per annum multiplied by the difference between $10,000 and the average loan amount outstanding during the month. The Credit Facility also contains other terms and provisions customary for agreements of this nature, and has been guaranteed by both the Company and Counsel. At June 30, 2011 and December 31, 2010 the Company was in compliance with all covenants of the Facility. Debt payable to a related party During the first six months of 2011, Counsel made net advances of $67 to the Company under an existing demand loan facility (the “Counsel Loan”) that bears interest at 10%. The primary reason for the advances was to fund the Company’s head office operations. At December 31, 2010 the balance of the Counsel Loan, including accrued interest, was $0, as the Company had advanced net $392 to Counsel. For further discussion of the related party debt and other transactions with Counsel, see Note 12. |
Segment Reporting
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Segment Reporting [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Disclosure [Text Block] | Note 13 – Segment Reporting Beginning in 2005, the Company operated in a single business segment, Patent Licensing. With the commencement of Counsel RB’s operations in the second quarter of 2009, the Company diversified into a second segment, Asset Liquidation. For the six months ending June 30, 2011 and 2010, only the Asset Liquidation segment had revenues and assets sufficiently significant to require separate reporting. There are no material inter-segment revenues. The Company’s business is conducted principally in the U.S. The table below presents information about the Asset Liquidation segment of the Company as of and for the three and six months ended June 30, 2011 and 2010:
The following table reconciles reportable segment information to the unaudited condensed consolidated financial statements of the Company:
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