(All dollar amounts are presented in thousands of U.S. dollars, unless otherwise indicated, except per share amounts)

The following discussion and analysis should be read in conjunction with the information contained in the unaudited condensed consolidated financial statements of the Company and the related notes thereto, appearing elsewhere herein, and in conjunction with the Management's Discussion and Analysis of Financial Condition and Results of Operations set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2007, filed with the Securities and Exchange Commission ("SEC").

Forward Looking Information

This Quarterly Report on Form 10-Q (the "Report") contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended, that are based on management's exercise of business judgment as well as assumptions made by, and information currently available to, management. When used in this document, the words "may", "will", "anticipate", "believe", "estimate", "expect", "intend", and words of similar import, are intended to identify any forward-looking statements. You should not place undue reliance on these forward-looking statements. These statements reflect our current view of future events and are subject to certain risks and uncertainties, as noted in the Company's Annual Report on Form 10-K, filed with the SEC, and as noted below. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results could differ materially from those anticipated in these forward-looking statements. We undertake no obligation, and do not intend, to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of any unanticipated events. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance that our expectations will materialize.

Overview and Recent Developments

C2 Global Technologies Inc. ("C2" or the "Company") was incorporated in the State of Florida in 1983 under the name "MedCross, Inc." which was changed to "I-Link Incorporated" in 1997, to "Acceris Communications Inc." in 2003, and to "C2 Global Technologies Inc." in 2005. The most recent name change reflects a change in the strategic direction of the Company following the disposition of its Telecommunications business in the third quarter of 2005. In the second quarter of 2006, the Company opened an office in Texas.

C2 owns certain patents, detailed below under "Company History" and "Intellectual Property", including two foundational patents in voice over internet protocol ("VoIP") technology - U.S. Patent Nos. 6,243,373 and 6,438,124 (together the "VoIP Patent Portfolio"), which it seeks to license. Subsequent to the disposition of its Telecommunications business, licensing of intellectual property constitutes the primary business of the Company. C2's target market consists of carriers, equipment manufacturers, service providers and end users in the internet protocol ("IP") telephone market who are using C2's patented VoIP technologies by deploying VoIP networks for phone-to-phone communications. The Company has engaged, and intends to continue to engage, in licensing agreements with third parties domestically and internationally. At present, no ongoing royalties are being paid to the Company.

The Company's objective is to obtain licensing and royalty revenue from the target market for its patents. In this regard, in the third quarter of 2005, the Company retained legal counsel with expertise in the enforcement of intellectual property rights, and on June 15, 2006, C2 Communications Technologies Inc., a wholly-owned subsidiary of the Company, filed a patent infringement lawsuit against AT&T, Inc. ("AT&T"), Verizon Communications, Inc. ("Verizon"), Qwest Communications International, Inc., Bellsouth Corporation, Sprint Nextel Corporation ("Sprint"), Global Crossing Limited, and Level 3 Communications, Inc. The complaint was filed in the Marshall Division of the United States District Court for the Eastern District of Texas, and alleged that these companies' VoIP services and systems infringe C2's U.S. Patent No. 6,243,373, entitled "Method and Apparatus for Implementing a Computer Network/Internet Telephone System" (the "VoIP Patent"). The complaint sought an injunction, monetary damages, and costs.

In June 2007, the complaint against Bellsouth Corporation was dismissed without prejudice. In February 2008, the Company entered into settlement and license agreements with AT&T and Verizon, and in May 2008 the Company entered into a settlement and license agreement with Sprint. In September 2008, the Company effectively concluded the litigation by entering into a settlement and license agreement with Qwest Communications International, Inc., Global Crossing Limited, and Level 3 Communications, Inc., which agreement also includes Sonus Networks, Inc. Under the terms of the settlement and license agreements, C2 granted each of the parties named above a non-exclusive, perpetual, worldwide, fully paid up, royalty free license under any of C2's present patents and patent applications, including the VoIP Patent, to make, use, sell or otherwise dispose of any goods and services based on such patents.

In the third quarter of 2007, the Company began investing in Internet-based e-commerce businesses, when it acquired minority positions in MyTrade.com, Inc., Buddy Media, Inc. ("Buddy Media") and LIMOS.com LLC ("LIMOS.com"). Its investment in MyTrade.com, Inc. was sold in the fourth quarter of 2007. In the fourth quarter of 2007 the Company acquired a one-third interest in Knight's Bridge Capital Partners Internet Fund No. 1 GP LLC ("Knight's Bridge GP"). The additional two-thirds interest in Knight's Bridge GP was acquired by parties affiliated with the Company's majority stockholder, Counsel Corporation (together with its subsidiaries, "Counsel"). Knight's Bridge GP was formed to acquire the general partner interests in 2007 Fund 1 LLP (the "Fund", subsequently renamed Knight's Bridge Capital Partners Internet Fund No. 1 LP). The Fund holds investments in several Internet-based e-commerce businesses. As the general partner of the Fund, Knight's Bridge GP manages the Fund, in return for which it earns a 2% per annum management fee with respect to the Fund's invested capital. Knight's Bridge GP also has a 20% carried interest on any incremental realized gains from the Fund's investments. In the second quarter of 2008, the Company increased its investment in Buddy Media. Following the purchase, the Company's investment in Buddy Media remains less than 5% on an as-converted basis.

The voting control of the Company's investment in LIMOS.com is held by a related party (the "Affiliate"), as detailed in Note 6 of the unaudited condensed consolidated financial statements included in Item 1 of this report. During the third quarter of 2008, the Affiliate entered into an agreement to sell all of the interests controlled by the Affiliate to the remaining investors in LIMOS.com. The purchase price was approximately two times the value of the original investment, and the Company received approximately $780 as net proceeds when the sale closed on October 29, 2008.

In April 2004, certain shareholders of C2 filed derivative and securities lawsuits in the Superior Court of the State of California against Counsel, C2 and several affiliated companies, as well as four present and former officers and directors of C2. Counsel and C2 believe that the claims are and were without merit, and have defended the actions accordingly. Effective June 18, 2008, in order to settle the litigation, and without any admission of liability by either C2 or the other defendants, the parties agreed to the following terms: (i) Counsel and/or certain of its affiliates, other than C2, would pay a total of $520 to the named plaintiffs; (ii) Counsel and/or a subsidiary other than C2 would give the plaintiffs approximately 370,000 common shares of C2, being five common shares of C2 for every share of C2 owned by the plaintiffs when the litigation commenced; (iii) plaintiffs who were also dissenting shareholders in an appraisal action filed by C2 in Florida in June 2004 would withdraw their dissent and C2 would return the shares that they tendered; (iv) Counsel and/or an affiliate would transfer 350,000 common shares to C2 for cancellation to settle the derivative claims of the litigation. As a result of the transfer of common shares to the plaintiffs and the cancellation of the shares transferred to C2, Counsel's percentage ownership in C2 decreased from approximately 92.5% to approximately 90.8%.

Company History

In 1994, we began operating as an Internet service provider and quickly identified that the emerging IP environment was a promising basis for enhanced service delivery. We soon turned to designing and building an IP telecommunications platform consisting of proprietary software and hardware, and leased telecommunications lines. The goal was to create a platform with the quality and reliability necessary for voice transmission.

In 1997, we began offering enhanced services over a mixed IP-and-circuit-switched network platform. These services offered a blend of traditional and enhanced communication services and combined the inherent cost advantages of an IP-based network with the reliability of the existing Public Switched Telephone Network ("PSTN").

In August 1997, we acquired MiBridge, Inc. ("MiBridge"), a communications technology company engaged in the design, development, integration and marketing of a range of software telecommunications products that support multimedia communications over the PSTN, local area networks ("LANs") and IP networks. The acquisition of MiBridge permitted us to accelerate the development and deployment of IP technology across our network platform.

In 1998, we first deployed our real-time IP communications network platform. With this new platform, all core operating functions such as switching, routing and media control became software-driven. This new platform represented the first nationwide, commercially viable VoIP platform of its kind. Following the launch of our software-defined VoIP platform in 1998, we continued to refine and enhance the platform to make it even more efficient and capable for our partners and customers.

Commencing in 2001, the Company entered the Telecommunications business. The assets of the Company's Telecommunications segment were owned through a wholly-owned subsidiary, Acceris Communications Corp. (name changed to WXC Corp. ("WXCC") in October 2005). This business was sold effective September 30, 2005.

In 2002, the U.S. Patent and Trademark Office issued U.S. Patent No. 6,438,124 (the "C2 Patent") for the Company's Voice Internet Transmission System. Filed in 1996, the C2 Patent reflects foundational thinking, application, and practice in the VoIP services market. The C2 Patent encompasses the technology that allows two parties to converse phone-to-phone, regardless of the distance, by transmitting voice/sound via the Internet. No special telephone or computer is required at either end of the call. The apparatus that makes this technically possible is a system of Internet access nodes, or Voice Engines, which provide digitized, compressed, and encrypted duplex or simplex Internet voice/sound. The end result is a high-quality calling experience whereby the Internet serves only as the transport medium and as such, can lead to reduced toll charges. Shortly after the issuance of our core C2 Patent, we disposed of our domestic U.S. VoIP network in a transaction with Buyers United, Inc., which closed on May 1, 2003. The sale included the physical assets required to operate our nationwide network using our patented VoIP technology (constituting the core business of the I-Link Communications Inc. ("ILC") business) and included a fully paid non-exclusive perpetual license to our proprietary software-based network convergence solution for voice and data. The sale of the ILC business removed essentially all operations that did not pertain to our proprietary software-based convergence solution for voice and data. As part of the sale, we retained all of our intellectual property rights and patents.

In 2003, we added to our VoIP patent holdings when we acquired the VoIP Patent, which included a corresponding foreign patent and related international patent applications. The vendor of the VoIP Patent was granted a first priority security interest in the patent in order to secure C2's obligations under the associated purchase agreement. The VoIP Patent, together with the existing C2 Patent and related international patents and patent applications, form our international VoIP Patent Portfolio that covers the basic process and technology that enable VoIP communication as it is used in the market today. Telecommunications companies that enable their customers to originate a phone call on a traditional handset, transmit any part of that call via IP, and then terminate the call over the traditional telephone network, are utilizing C2's patented technology. The comprehensive nature of the VoIP Patent is summarized in the patent's abstract, which, in pertinent part, describes the technology as follows: "A method and apparatus are provided for communicating audio information over a computer network. A standard telephone connected to the PSTN may be used to communicate with any other PSTN-connected telephone, where a computer network, such as the Internet, is the transmission facility instead of conventional telephone transmission facilities." As part of the consideration for the acquisition of the VoIP Patent, the vendor is entitled to receive 35% of the net proceeds from our VoIP Patent Portfolio.

Revenue and contributions from operations related to our intellectual property, up to December 31, 2004, were based on the sales and deployment of our VoIP solutions, which we ceased directly marketing in 2005, rather than on the receipt of licensing fees and royalties. Revenue in the first nine months of 2008 was the result of entering into the settlement and license agreements with AT&T, Verizon, Sprint, Qwest Communications International, Inc., Global Crossing Limited, Level 3 Communications, Inc. and Sonus Networks, Inc., as described above. We expect to generate ongoing licensing and royalty revenue in this business as we gain recognition of the underlying value in our VoIP Patent Portfolio through the enforcement of our intellectual property rights, as discussed above under "Overview and Recent Developments".

As discussed above under "Overview and Recent Developments", in the third quarter of 2007, the Company began investing in Internet-based e-commerce businesses through its acquisitions of minority positions in MyTrade.com, Inc. (sold in the fourth quarter of 2007), Buddy Media, Inc. and LIMOS.com LLC, and it continued its investment activities in the fourth quarter of 2007 with the acquisition of a one-third interest in Knight's Bridge Capital Partners Internet Fund No. 1 GP LLC. At September 30, 2008 the Company's investment in these businesses totaled $635. The Company's objective is to realize long-term capital appreciation as the value of these businesses is developed and recognized. In October 2008 the Company closed the sale of its investment in LIMOS.com LLC for net proceeds of approximately $780, almost twice its initial investment amount of $400.

Intellectual Property

In 2005 and 2006, the Company was awarded patents for the VoIP Patent from the People's Republic of China, Hong Kong, and Canada. In the fourth quarter of 2006, the European Patent Office advised that it intended to grant C2 a European patent that is equivalent to the VoIP Patent. The decision to grant the European patent was subsequently published on March 21, 2007 and in June 2007 the Company applied for the validation of the patent in fifteen European countries. In the fourth quarter of 2006, the Company was awarded a patent in Canada for the C2 Patent. In the third quarter of 2008, it was awarded a patent in South Korea for the C2 Patent.

Below is a summary of the Company's patents:

Type                 Title               Number          Status

VoIP Architecture    Computer            U.S. No.        Issued: June 5, 2001
                     Network/Internet    6,243,373       Expires: November 1, 2015
                     Telephone System
                     ("VoIP Patent")

                                         Australia       Issued: June 1, 2000
                                         No. 716096      Expires: October 29, 2016

                                         People's        Issued: December 14, 2005
                                         Republic of     Expires: October 29, 2016
                                         China
                                         No.
                                         ZL96199457.6

                                         Canada No.      Issued: October 18, 2005
                                         2,238,867       Expires: October 29, 2016

                                         Hong Kong       Issued: August 11, 2006
                                         No.             Expires: October 29, 2016
                                         HK1018372

                                         Europe No.      Granted March 21, 2007
                                         0873637

                     Voice Internet      U.S. No.        Issued: August 20, 2002
                     Transmission        6,438,124       Expires: July 22, 2018
                     System("C2
                     Patent")

                                         People's        Issued: May 21, 2004
                                         Republic of     Expires: February 5, 2017
                                         China
                                         No.
                                         ZL97192954.8

                                         Canada No.      Issued: October 10, 2006
                                         2,245,815       Expires: February 5, 2017

                                         South Korea     Issued: July 14, 2008
                                         No. 847335      Expires: February 5, 2017

                     Private IP          U.S. No.        Issued: May 8, 2007
                     Communication       7,215,663       Expires: June 12, 2017
                     Network
                     Architecture

Conferencing         Delay               U.S. No.        Issued: May 19, 1998
                     Synchronization     5,754,534       Expires: May 6, 2016
                     in
                     Compressed Audio
                     System

                     Volume Control      U.S. No.        Issued: April 27, 1999
                     Arrangement for     5,898,675       Expires: April 29, 2016
                     Compressed
                     Information
                     Signal Delays

In addition to the C2 and VoIP Patents, which cover the foundation of any VoIP system, our patent portfolio includes:

Private IP Communication Network Architecture (U.S. Patent No. 7,215,663 granted May 8, 2007) - This invention relates generally to multimedia communications networks. The patent's Internet Linked Network Architecture delivers telecommunication type services across a network utilizing digital technology. The unique breadth and flexibility of telecommunication services offered by the Internet Linked Network Architecture flow directly from the network over which they are delivered and the underlying design principles and architectural decisions employed during its creation.

C2 also owns intellectual property that solves teleconferencing problems:

Delay Synchronization in Compressed Audio Systems (U.S. Patent No. 5,754,534 granted May 19, 1998) - This invention eliminates popping and clicking when switching between parties in a communications conferencing system employing signal compression techniques to reduce bandwidth requirements.

Volume Control Arrangement for Compressed Information Signals (U.S. Patent No. 5,898,675 granted April 27, 1999) - This invention allows for modifying amplitude, frequency or phase characteristics of an audio or video signal in a compressed signal system without altering the encoder or decoder employed by each conferee in a conferencing setting, so that individuals on the conference call can each adjust their own gain levels without signal degradation.

Industry

The communications services industry continues to evolve, both domestically and internationally, providing significant opportunities and risks to the participants in these markets. Factors that have driven this change include:

· entry of new competitors and investment of substantial capital in existing and new services, resulting in significant price competition

· technological advances resulting in a proliferation of new services and products and rapid increases in network capacity

· The Telecommunications Act of 1996, as amended; and

· growing deregulation of communications services markets in the United States and in other countries around the world

Historically, the communications services industry transmitted voice and data over separate networks using different technologies. Traditional carriers have typically built telephone networks based on circuit switching technology, which establishes and maintains a dedicated path for each telephone call until the call is terminated.

VoIP is a technology that can replace the traditional telephone network. This type of data network is more efficient than a dedicated circuit network because the data network is not restricted by the one-call, one-line limitation of a traditional telephone network. This improved efficiency creates cost savings that can be either passed on to the consumer in the form of lower rates or retained by the VoIP provider. In addition, VoIP technology enables the provision of enhanced services such as unified messaging.

Competition

We are seeking to have telecommunications service providers ("TSPs"), equipment suppliers ("ESs") and end users license our patents. In this regard, our competition is existing technology, outside the scope of our patents, which allows TSPs and ESs to deliver communication services to their customers.

VoIP has become a widespread and accepted telecommunications technology, with a variety of applications in the telecommunications and other industries. While we and many others believe that we will see continued proliferation of this technology in the coming years, and while we believe that this proliferation will occur within the context of our patents, there is no certainty that this will occur, and that it will occur in a manner that requires organizations to license our patents.

Government Regulation

Recent legislation in the United States, including the Sarbanes-Oxley Act of 2002, has increased regulatory and compliance costs as well as the scope and cost of work provided to us by our independent registered public accountants and legal advisors. The Company became subject to Section 404 reporting as of December 31, 2007. As implementation guidelines continue to evolve, we expect to continue to incur costs, which may or may not be material, in order to comply with legislative requirements or rules, pronouncements and guidelines by regulatory bodies.

Critical Accounting Policies

Management's Discussion and Analysis of Financial Condition and Results of Operations discusses our unaudited condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles ("GAAP") in the United States. This requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates required for the preparation of the unaudited condensed consolidated financial statements included in Item 1 of this Report were those related to intangible assets, goodwill, investments, deferred tax assets, liabilities, and contingencies surrounding litigation. These estimates are considered significant 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. Management bases its estimates and judgments on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. On an on-going basis, management evaluates its estimates and judgments, including those related to intangible assets, contingencies, collectibility of receivables and litigation. Actual results could differ from these estimates.

The critical accounting policies used in the preparation of our consolidated financial statements are discussed in our Annual Report on Form 10-K for the year ended December 31, 2007. To aid in the understanding of our financial reporting, a summary of these policies is provided in Note 2 of the unaudited condensed consolidated financial statements included in Item 1 of this Report.

Management's Discussion of Financial Condition

Liquidity and Capital Resources

At September 30, 2008 the Company had stockholders' equity of $5,236, as compared to a stockholders' deficit of $941 at December 31, 2007. Working capital at September 30, 2008 was $3,898, as compared to a working capital deficit of $1,653 at December 31, 2007. The primary reason for the improvement of the Company's financial position is the revenue from the settlement and license agreements that the Company entered into in February, May and September 2008. The Company's cash and cash equivalents increased by $5,456, from $67 at December 31, 2007 to $5,523 at September 30, 2008.

In the first nine months of 2008, the Company realized revenues from continuing operations for the first time since 2004. However, the Company must continue to realize value from its intellectual property through ongoing licensing and royalty revenue, as discussed in Note 1 of the unaudited condensed consolidated financial statements, in order to continue as a going concern. Absent an ongoing revenue stream, the Company may not be able to obtain additional financing to fund its operations without the support of Counsel. Additionally, management believes that the Company does not, at this time, have the ability to obtain additional financing from third parties in order to pursue expansion through acquisition.

At September 30, 2008 the Company had no related party debt owing to its 91% . . .