Acquisition of EP USA, LLC

9 Months Ended

Sep. 30, 2011

Business Combinations [Abstract]

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 expired without exercise 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.

The following table summarizes the consideration paid for Equity Partners and the amounts of the assets acquired and liabilities assumed recognized:

At September 30, 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 nine months ended September 30, 2011)		46
Recognized amounts of identifiable assets acquired and liabilities assumed
Accounts receivable		312
Property, plant and equipment		2
Goodwill		505
Total identifiable net assets		819

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 2.10%, 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 $46 of professional fees incurred by the Company, which have been expensed in the nine months ended September 30, 2011.