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Acquisition of Heritage Global Partners, Inc.
 6 Months Ended
Jun. 30, 2012
Business Combinations [Abstract]  
Business Combination Disclosure [Text Block]

Note 3 – Acquisition of Heritage Global Partners, Inc.

 

On February 29, 2012 the Company acquired all of the issued and outstanding capital stock in Heritage Global Partners, Inc. (“Heritage Global Partners”), a full-service, global auction and asset advisory firm. The acquisition of Heritage Global Partners is consistent with CRBCI’s strategy to expand the services provided by its asset liquidation business. In connection with the acquisition, CRBCI entered into employment agreements with the previous owners and employees of Heritage Global Partners.

 

The following table summarizes the consideration paid for Heritage Global Partners and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date:

  

At February 29, 2012      
    $  
Consideration paid        
Cash     3,000  
Promissory notes, net of receivable from owners 1     849  
Equity instruments:        
1,000,000 CRBCI common shares 2     2,100  
625,000 options to purchase CRBCI common shares at $2.00 per share 3     1,131  
Fair value of total consideration     7,080  
         
Acquisition related costs (included in selling, general, and administrative expenses in CRBCI’s condensed consolidated interim statement of operations for the six months ended June 30, 2012)     81  
         
Recognized amounts of identifiable assets acquired and liabilities assumed        
Cash     656  
Accounts receivable (net of $0 allowance for doubtful accounts)     878  
Deposits     20  
Prepaid expenses     35  
Property, plant and equipment     37  
Accounts payable and accrued liabilities     (1,213 )
Client liability account     (1,424 )
Short-term note payable     (100 )
Total identifiable net liabilities assumed     (1,111 )
Goodwill     8,191  
      7,080  

 

1 The notes (the “Promissory Notes”) are due in full on August 31, 2012, and bear interest at the U.S. Prime Rate.

 

2 Determined using the closing price of the Company’s common shares on February 29, 2012

 

3 Determined using the Black-Scholes Option Pricing Model. Inputs to the model included an expected volatility rate of 133%, a risk-free interest rate of 1.25%, an expected life of 4.75 years, and an expected dividend yield of $nil.

 

The fair value of the accounts receivable is the value as reported in the above table.

 

The allocation of the purchase price, as disclosed above, is provisional pending completion of the audit of the opening balance sheet and the final allocation of the assets acquired and liabilities assumed. This will be completed within one year of the acquisition date.

 

The only transactions recognized separately from the acquisition were the acquisition costs noted in the above table.