SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the month of December 2002

COUNSEL CORPORATION

(Translations of registrant’s name into English)

Exchange Tower, Suite 1300
130 King Street West
Toronto, Ontario M5X 1E3
(Address of principal executive offices)

[Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.]

Form 20-F [X] Form 40-F [ ]

[Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.]

Yes [ ] No [X]

[If “Yes” is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82-_____________]

COUNSEL

CORPORATION

THIRD

QUARTER

REPORT 2002


FOR THE PERIOD ENDING SEPTEMBER 30, 2002	3

REPORT TO SHAREHOLDERS

We are pleased to report Counsel Corporation’s consolidated results for the third quarter of 2002.

Counsel continues to make significant progress towards its strategic objectives as follows:

Communications


•	Our international and domestic long distance service provider, WorldxChange, has now completed its second consecutive quarter of operating profitability and third consecutive quarter of positive EBITDA, and we expect the trend to continue. The WorldxChange business, since its initial capitalization, has not required any additional funding from the Company.

•	We have entered into agreements to acquire the assets of RSL COM U.S.A., Inc. and the shares of Local Telecom Holdings LLC, subject to due diligence and regulatory approval. We expect these transactions to be completed in the fourth quarter. These transactions will add significant traffic to WorldxChange’s existing fixed cost network, allowing the cost of operations to be shared over a larger revenue base and thereby improving profitability.

•	We have completed negotiations with I-Link Corporation, our 60.2%-owned subsidiary and the parent of WorldxChange, which will see the Company’s ownership increase to 76.1% by exchanging US$26.6 million of advances and accrued interest, due from I-Link, into common shares. This restructuring will take effect after I-Link’s shareholders have approved certain corporate proposals at a meeting which is expected to occur in the first quarter of 2003.

•	I-Link’s litigation with Red Cube has been resolved on favorable terms. The arbitrator has dismissed all claims against I-Link with prejudice and determined that Red Cube had breached the agreements between the parties. I-Link has been awarded US$6.7 million in damages, plus costs incurred. Management is assessing how to realize on its award and will record income if and when amounts are collected.

Real Estate


•	We completed the acquisition of five income producing properties totaling 730,952 sq. ft. of gross leasable area for US$35.5 million, assuming mortgages of US$20.0 million. Included in this acquisition is a 13-acre site in Peterborough, Ontario for which a plan of development is underway.

Corporate


•	We have exited the medical products segment with the disposition of Sage BioPharma Inc., effective October 4, 2002, for net proceeds of $1.4 million. The results of Sage have been treated as discontinued operations in the quarter.

•	Gary Clifford has joined our management team as Chief Financial Officer.

For the quarter ended September 30, 2002, consolidated revenues from continuing operations were $31.4 million compared to $31.7 million in the second quarter and $35.4 million in third quarter of 2001. This quarterly decline in revenues is directly attributable to a shift in Counsel’s mix of communications services, toward retail and away from wholesale. The rationale for this shift is to develop a business with higher margins and a more loyal customer base, which will ultimately result in the optimization of network capacity.

Consolidated operating income continued to show improvements. Operating losses (comprised of earnings from continuing operations before gains and other income, other impairments and losses, interest, taxes, equity and minority positions) declined to $4.7 million from $5.8 million in the second quarter and $14.2 million in the third quarter of 2001.

We are excited about the prospects for Counsel as we focus our strategy to acquire, enhance, and grow healthy businesses in communications, real estate and seniors living. At the right time and on the right terms, Counsel will continue to exit from non-strategic investments and invest in our core businesses.

On behalf of the Board,

LOGO

ALLAN SILBER

Chairman & Chief Executive Officer

November 21, 2002.

INTERIM MANAGEMENT’S DISCUSSION & ANALYSIS

FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2002

(All dollar amounts are in US dollars, unless otherwise indicated)

This interim Management’s Discussion and Analysis (“MD&A”) of Counsel Corporation (“Counsel”, the “Company”) is based on the Company’s interim consolidated financial statements prepared in accordance with accounting principles generally accepted in Canada and the guidance of the Canadian Institute of Public and Private Real Estate companies (“CIPREC”), and should be read in conjunction with the most recent annual MD&A, financial statements and the notes thereto. References to interim financial statements are to the unaudited consolidated financial statements of Counsel as at, and for the nine months ended, September 30, 2002.

SAFE HARBOUR STATEMENT

This MD&A report contains forward-looking statements that involve risk and uncertainties. These statements can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “anticipate”, “estimate”, “plans”, “continue”, or the negative thereof or other variations thereon or comparable terminology referring to future events or results. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous factors. These factors include, without limitation, the timing of acquisitions and expansion opportunities, technological change that may impact the Company’s capital expenditures and results of operations, and competitive factors that may, among other matters impact revenue, operating costs, alter the timing and amount of the Company’s capital expenditures and results of operations. Any of these factors could cause actual results to vary materially from current results or the Company’s currently anticipated future results. The Company wishes to caution readers not to place undue reliance on such forward-looking statements that speak only as of the date made. Additional information concerning factors that cause actual results to materially differ from those in such forward-looking statements is contained in the Company’s filings with Canadian and United States securities regulatory authorities.

DEFINITIONS

The Company focuses its analysis on operating income (loss) and net earnings (loss). Operating income (loss) and net earnings (loss) are reconciled in the body of the Company’s unaudited consolidated statement of operations. Operating income (loss) is calculated as earnings from continuing operations before other gains, other losses and impairments, interest, taxes, equity in losses and minority interests.

RECLASSIFICATIONS

Certain comparative figures have been reclassified to conform to the current presentation.

OVERVIEW

During the third quarter of 2002 the Company executed on its strategic plan, summarized by the following segment highlights:

Communications:


•	The Company’s long distance business, WorldxChange, has now completed its second consecutive quarter of operating profitability and the trend is expected to continue.

•	The Company has entered into purchase agreements to acquire the assets of RSL COM U.S.A. Inc. and the shares of Local Telecom Holdings LLC, subject to due diligence, regulatory approval and agreement on certain price adjustments. The Company expects these transactions to be completed in the fourth quarter. These transactions


	will add significant traffic to the Company’s existing fixed cost network allowing the cost of operations to be shared over a larger revenue base, improving profitability.

•	The Company completed negotiations with I-Link Corporation (“I-Link”), our 60.2% owned subsidiary, that will see the Company’s ownership increase to 76.1% by exchanging $26.6 million of advances and accrued interest due from I-Link into common shares. This transaction is conditional upon I-Link’s shareholder approval of certain corporate proposals, which approval is expected in the first quarter of 2003.

•	I-Link’s litigation with Red Cube has been resolved on favorable terms. The arbitrator has dismissed all claims against I-Link with prejudice and determined that Red Cube had breached the agreements between the parties. I-Link has been awarded $6.7 million in damages, plus costs incurred. Management is assessing how to realize on its award and will record income if and when amounts are collected.

Real Estate:


•	The Company completed the acquisition of five Income producing properties totaling 730,952 sq. ft. of gross leaseable area for $35.5 million, assuming mortgages of $20.0 million.

Corporate:


•	The Company exited the medical products business with the disposition of Sage Biopharma Inc. (“Sage”) effective October 4, 2002 for net proceeds of $1.4 million. The results of Sage have been treated as discontinued operations in the quarter.

•	Gary Clifford has joined our management team as Chief Financial Officer.

FINANCIAL CONDITION

Cash and cash equivalents and short-term investments declined by $10.5 million during the nine months ended September 30, 2002. The Company’s ongoing funding of the Communications platform, the acquisition of 730,952 square feet of income producing properties, the settlement of the Bergen Brunswig litigation, scheduled debt and capital lease payments, the re-purchase of the Company’s common shares for cancellation, and the purchase of property, plant and equipment accounted for the cash reductions. Proceeds on the sale of short-term investments, a reduction in the day sales outstanding (“DSO”), and cash flow from real estate operations contributed to increases in the cash balance during the nine months ended September 30, 2002. Prepaid expense and deposits increased as the Company made a deposit and incurred costs relating to potential acquisitions, and gave recognition to a deposit relating to its long distance business that could not previously be validated. Income producing properties primarily include Counsel’s five properties acquired in July 2002. Property, plant and equipment declined as the Company recorded $6.2 million in depreciation charges, and $2.9 million in impairment charges. The impairment related to a decision to close some network switching sites and adopt the use of the soft switch technology developed internally at I-Link. Further it was determined that the future use of excess fiber was no longer required. These declines were offset primarily by the acquisition of new network equipment. Accounts payable and accrued liabilities declined as the Company settled amounts under the Bergen Brunswig litigation and revised its estimates of liabilities associated with the acquisition of the long distance business. Mortgages and loans payable increased due to the assumption of mortgages on the acquisition of income producing properties.

The Company remains financially sound with over $17 million in cash equivalents and short-term investments. Management expects operating losses in the communications platforms to cease by the first quarter of 2003. Real estate operations have been cash flow positive from the outset. The operations of seniors living are expected to remain cash flow neutral. Management’s strategy is to continue to monetize its position in its various investments on acceptable terms in order to provide capital to make acquisitions in support of the Company’s communications and real estate platforms.

CASH FLOW ANALYSIS

For the nine months ended September 30, 2002 cash and cash equivalents decreased by $10.5 million. In addition to funding operations, significant outflows included the ongoing funding of the communications business, the acquisition of real estate utilized $15.5 million, $9.8 million was invested in short-term investments, $6.6 million was used to reduce accounts payable and accrued liabilities, $3.4 million was used for deposits and costs related to contemplated acquisitions, $3.0 million related to scheduled debt and capital lease payments, $1.3 million was paid as interest payments on the convertible debentures, $1.5 million was used to acquire capital equipment, $0.9 million was spent to re-purchase shares of the Company for cancellation. Outflows were primarily offset by proceeds on the sale of short-term investments totaling $39.4 million, a reduction in accounts receivable of $4.6 million, and proceeds on the sale of capital equipment totaling $0.7 million.

Management plans to use excess cash to support its operating companies and to pursue acquisitions in the communications and real estate segments.

RESULTS OF OPERATIONS

For the Three and Nine Months Ended September 30, 2002

The following table highlights quarterly results in 000’s of US dollars from continuing operations for the last seven quarters:


		2001			2001			2001			2001			2002			2002			2002
		Q1			Q2			Q3			Q4			Q1			Q2			Q3


Revenues
	Canada	$	7,688		$	7,734		$	7,662		$	7,741		$	8,063		$	8,414		$	9,463
	United States		2,595			15,705			27,690			27,983			26,243			23,280			21,958

			10,283			23,439			35,352			35,724			34,306			31,694			31,421
Cost of revenues			2,315			14,149			23,298			19,754			15,964			14,156			12,433
Selling, general and administration			11,308			15,978			20,192			30,104			20,876			18,558			19,657
Research and development			357			524			434			306			382			465			317
Provision for doubtful accounts			17			1,269			1,278			1,469			1,493			1,203			1,137
Depreciation and amortization			1,210			3,496			4,353			3,974			3,118			3,099			2,531

Operating income (loss)			(4,924	)		(11,977	)		(14,203	)		(19,883	)		(7,527	)		(5,787	)		(4,654	)
Gains and other income:
	Short term investments		8,727			2,171			26,861			4,937			26,679			821			224
	Portfolio investments		64			–			–			–			–			–			–
	Sales of subsidiary		–			–			–			589			–			–			–
	Retirement of debt		–			–			–			1,093			–			–			628
	Property, plant and equipment		–			–			3,373			–			–			–			–
	Other		–			–			–			59			–			–			941
Impairments and other losses:
	Write-down of investment		–			–			7,036			3,923			–			–			–
	Write-down of goodwill		–			–			8,040			–			–			–			–
	Short term investments		–			–			–			–			136			2,655			1,201
	Portfolio investments		–			8,869			1,464			–			–			–			640
	Property, plant and equipment		–			–			–			–			1			1,863			1,336

Operating income (loss) adjusted for other gains/losses		$	3,867		$	(18,675	)	$	(509	)	$	(17,128	)	$	19,015		$	(9,484	)	$	(6,038	)

Revenues

Consolidated revenues from continuing operations for the quarter ended September 30, 2002, totaled $31.4 million, a decrease of $4.0 million from the $35.4 million recognized during the third quarter of 2001 and a decrease of $0.3 million from the $31.7 million recognized during the second quarter of 2002. Lower revenue in communications due to reductions in the rate per minute continued this past quarter. The Company is substantially margin-protected due to the structure of its carrier contracts on network traffic. Management has recently launched new programs targeted at growing the subscriber base by shifting its focus toward “1+” customers and by revising its channel strategy. On a year to date basis, revenues were $97.4 million compared to $69.1 million in 2001. The increase of $28.3 million primarily relates to the nine-month inclusion of the communication business in 2002 versus a four-month inclusion in 2001. Management is pleased with the consistency in network utilization by our customer base. Subscriber loyalty at WorldxChange can be attributed to its focus on competitive pricing combined with a high Quality of Service (“QoS”).

Operating income (loss)

Operating loss was $4.7 million in the third quarter, an improvement of $9.5 million over the $14.2 million loss incurred during the third quarter of 2001 and an improvement of $1.1 million from the $5.8 million reported during the second quarter of 2002. Positive operating income at the Company’s long distance and real estate businesses accounted for the improvement. On a year-to-date basis, operating loss was $18.0 million down from $31.1 million in 2001. The improvement relates to the efforts of management in bringing efficiency to the operation of its communication businesses.

Other gains

The Company realized a large amount of the embedded value in its short-term investments with the sale of its holding in AmeriSource Bergen. An additional gain was recorded relating to certain assets in its long distance business which were unrecorded at the time of the acquisition. The Company has also discharged a liability estimated on the acquisition of WorldxChange resulting in a $0.6 million gain. Offsetting these gains were impairment charges relating to short-term investments, portfolio investments and property, plant and equipment.

Interest expense

The Company records interest expense from mortgages, loans, the liability element of its convertible debentures and its revolving demand facility. Each debt instrument has different terms, interest rates and maturity dates. $33.7 million of the Company’s mortgages and loans payable is denominated in Canadian dollars, while $10.5 million is denominated in US dollars. The increase in interest for the quarter related to the assumption of $20.0 million in mortgages as part of the Company’s acquisition of five income-producing properties and a property held for development. On a year to date basis, interest expense was $3.0 million compared to $3.3 million in 2001.

Income taxes

The Company records minimal taxation liabilities in the accounts based on unrecorded tax assets relating to operating and non-operating tax losses in various jurisdictions from previous periods. At September 30, 2002, the Company has $74.0 million of operating losses and $21.0 million of capital losses available for future use.

Non-controlling interest

The Company owns less than 100% of some of its subsidiaries. Non-controlling interest is the accounting mechanism that eliminates from the Company’s earnings the profit and or loss attributable to minority partners. No minority interest is recorded in the books of Counsel because the equity interest of minority partners is in a deficit position and they are not obligated to fund losses.

Discontinued operations

The Company disposes of operating segments from time to time.

In May 2002, the Company settled the final payment due under the definitive agreement with the purchaser regarding the disposition of its pharmaceutical products business in 2001. During the course of the settlement, the purchaser disputed certain payments regarding inventories as set out in the agreement. The Company has assessed the impact of this dispute and has written down its receivable from the purchaser. The loss from discontinued operations in the second quarter regarding this disposal was $0.4 million, inclusive of an income tax recovery of $0.2 million.

In the third quarter, the Company adopted a formal plan of disposal and entered into an agreement for the disposition of its medical products segment that closed on October 4, 2002. The net proceeds on the disposition were approximately $1.4 million, which resulted in a third quarter loss on disposition of $0.4 million. In the second quarter, upon adoption of a new accounting pronouncement relating to goodwill and intangibles, the Company recorded a $1 million charge for impairment against the goodwill of this business. This charge was recorded as an adjustment to retained earnings at January 1, 2002.

A summary of the carrying value of the assets and liabilities of discontinued operations can be found in note 8 of the interim consolidated financial statements.

CONSOLIDATED BALANCE SHEETS


	September 30		December 31
	2002		2001
(In 000’s of US$)	(Unaudited)		(Audited – note 1)


ASSETS
Current assets
Cash and cash equivalents	$	14,109	$	24,624
Short-term investments		3,033		8,932
Accounts receivable (less allowance for doubtful accounts of $842; 2001 – $2,198)		14,173		20,053
Income taxes recoverable		2,206		2,202
Future income taxes		125		970
Prepaid expenses and deposits		9,106		5,975
Assets of discontinued operations (note 8)		3,665		9,678

		46,417		72,434
Long-term assets
Income producing properties, net (note 5)		34,821		–
Real estate property under development		2,963		2,433
Loans and mortgage		9,448		9,221
Portfolio investments		3,927		3,219
Property, plant and equipment, net		33,096		43,226
Goodwill		284		3,368
Acquired technology, net		7,530		9,969

	$	138,486	$	143,870

LIABILITIES
Current liabilities
Accounts payable	$	4,586	$	10,719
Accrued liabilities		18,749		26,262
Current portion of deferred revenue		623		2,563
Current portion of mortgages and loans payable (note 9)		10,992		10,508
Current portion of capital leases		3,292		3,034
Liabilities of discontinued operations (note 8)		2,424		3,763

		40,666		56,849
Long-term liabilities
Deferred revenue		337		768
Mortgages and loans payable (note 9)		33,259		14,690
Capital leases		4,790		6,986
Convertible debentures payable		3,736		4,801
Future income taxes		34,362		23,282

		117,150		107,376

Commitments, guarantees, and contingencies (note 10)

Shareholders’ equity		21,336		36,494

	$	138,486	$	143,870

The accompanying notes are an integral part of these unaudited consolidated financial statements.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the period ended September 30

Capital Stock

Equity

Component

No. of

of Convertible

Retained

Common

Contributed

Debentures

Earnings

Total

(In 000’s of US$) (Unaudited)

Shares

Amount

Surplus

Payable

(Deficit)

Shareholders’

(In 000’s)

Equity

Balance – December 31, 2000

23,937

109,452

2,711

44,042

(51,702

)

104,503

Common shares purchased for cancellation

(1,034

)

(4,149

)

2,094

–

(2,055

)

Accretion of equity component of debentures payable

–

2,369

(2,369

)

–

Gain on retirement of debentures payable net of income taxes

–

1,941

(4,523

)

–

(2,582

)

Net loss

–

(39,304

)

(39,304

)

Balance – September 30, 2001

22,903

105,303

6,746

41,888

(93,375

)

60,562

Common shares purchased for cancellation

(410

)

(2,451

)

1,784

–

(667

)

Accretion of equity component of debentures payable

–

790

(790

)

–

Gain on retirement of debentures payable net of income taxes

–

353

(845

)

–

(492

)

Net loss

–

(22,909

)

(22,909

)

Balance – December 31, 2001

22,493

102,852

8,883

41,833

(117,074

)

36,494

Adjustment related to the adoption of new accounting pronouncement (note 3)

–

(1,000

)

(1,000

)

Restated balance – December 31, 2001

22,493

102,852

8,883

41,833

(118,074

)

35,494

Common shares purchased for cancellation

(492

)

(2,250

)

1,305

–

(945

)

Accretion of equity component of debentures payable

–

2,270

(2,270

)

–

Net loss

–

(13,213

)

(13,213

)

Balance – September 30, 2002

22,001

100,602

10,188

44,103

(133,557

)

21,336

The accompanying notes are an integral part of these unaudited consolidated financial statements.

CONSOLIDATED STATEMENTS OF OPERATIONS



		For the three months						For the nine months
		ended September 30						ended September 30
(In 000’s of US$, except share and per share amounts)
(Unaudited)		2002			2001			2002			2001


Revenues
	Communication services	$	21,535		$	25,742		$	69,014		$	40,902
	Communication technology licensing		321			1,420			2,790			3,310
	Seniors living services		8,079			7,965			23,790			23,627
	Income producing properties		1,486			–			1,639			–
	Technology services		–			225			188			1,235

			31,421			35,352			97,421			69,074

Cost of revenues
	Communication services		12,433			22,989			42,295			38,959
	Technology services		–			309			258			803

			12,433			23,298			42,553			39,762

Operating expenses
	Selling, general and administrative		19,657			20,192			59,091			47,478
	Research and development		317			434			1,164			1,315
	Provision for doubtful accounts		1,137			1,278			3,833			2,564
	Depreciation and amortization		2,531			4,353			8,748			9,059

			23,642			26,257			72,836			60,416

Operating loss			(4,654	)		(14,203	)		(17,968	)		(31,104	)
Gains and other income:
Short-term investments			224			26,861			27,724			37,759
Portfolio investments			–			–			–			64
Property, plant and equipment			–			3,373			–			3,373
Other			1,569			–			1,569			–
Impairments and other losses:
Write-down of investments			–			–			–			7,036
Impairment of goodwill			–			8,040			–			8,040
Short-term investments			1,201			–			3,992			–
Portfolio investments			640			8,500			640			10,333
Impairment of property, plant and equipment			1,336			–			3,200			–

Earnings (loss) before undernoted			(6,038	)		(509	)		3,493			(15,317	)
Equity in losses of significantly influenced companies			–			(761	)		–			(5,582	)
Interest income			76			294			369			1,582
Interest expense			(1,083	)		(1,182	)		(2,954	)		(3,323	)

Earnings (loss) before income taxes			(7,045	)		(2,158	)		908			(22,640	)
Provision for income taxes			447			9,211			11,940			14,641
Non-controlling interest			–			(243	)		64			(1,498	)

Loss from continuing operations			(7,492	)		(11,126	)		(11,096	)		(35,783	)
Discontinued operations (note 8)			(868	)		(1,648	)		(2,117	)		(3,521	)

Net loss		$	(8,360	)	$	(12,774	)	$	(13,213	)	$	(39,304	)

Loss per share
Loss from continuing operations		$	(0.37	)	$	(0.52	)	$	(0.60	)	$	(1.65	)
Loss from discontinued operations			(0.04	)		(0.07	)		(0.10	)		(0.15	)

Net loss per share		$	(0.41	)	$	(0.59	)	$	(0.70	)	$	(1.80	)

Weighted average number of common shares outstanding (000’s)			22,149			22,903			22,247			23,088

The accompanying notes are an integral part of these unaudited consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS



			For the three months						For the nine months
			ended September 30						ended September 30

(in thousands of US$) (Unaudited)			2002			2001			2002			2001


Cash provided by (used in)
Operating activities
	Loss from continuing operations		$	(7,492	)	$	(11,126	)	$	(11,096	)	$	(35,783	)
	Non-cash items included in loss:
		Future income taxes		795			10,022			12,135			14,707
		Amortization of deferred revenue		(473	)		(1,309	)		(2,371	)		(2,151	)
		Depreciation of property, plant and equipment		1,891			2,338			6,188			4,889
		Impairment of property, plant and equipment		1,070			–			2,934			–
		Loss on sale of property, plant and equipment		266			–			266			–
		Amortization of goodwill and intangible assets		640			2,015			2,560			4,170
		Impairment of goodwill		–			8,040			–			8,040
		Gain on sale of short-term investments		(224	)		(26,861	)		(27,724	)		(37,759	)
		Loss on sale of portfolio investments		61			–			61			–
		Equity in losses of significantly influenced corporations		–			761			–			5,582
		Write-down of short term investments		1,201			–			3,992			–
		Write-down of portfolio investments		579			8,500			579			17,369
		Gain on sale of senior living facilities		–			(3,373	)		–			(3,373	)
		Gain on sale of other assets		–			(63	)		–			(127	)
		Discharge of lease liability and recognition of deposits		(1,569	)		–			(1,569	)		–
		Accretion of liability component of debentures payable		72			132			217			396
		Non-controlling interest		–			(243	)		64			(1,498	)
	Proceeds on sale of short-term investments			1,743			35,563			39,383			52,240
	Proceeds on sale of portfolio investments			88			–			88			–
	Unrealized foreign exchange loss			372			–			654			–
	Cash used in discontinued operations			(901	)		(753	)		(568	)		(3,684	)
	(Increase) decrease in accounts receivable			560			416			4,550			(3,196	)
	(Increase) decrease in income taxes recoverable			125			(760	)		(4	)		(63	)
	(Increase) decrease in loans and mortgage, prepaid expenses and deposits			(145	)		(6,346	)		(3,968	)		(10,365	)
	Increase (decrease) in accounts payable and accrued liabilities			(2,551	)		4,248			(6,554	)		(946	)

				(3,892	)		21,201			19,817			8,448

Investing activities
	Investment in significantly influenced corporations			–			(684	)		–			(2,502	)
	Increase in portfolio investments			–			–			(500	)		–
	Proceeds on sale of seniors living facilities			–			7,006			–			7,006
	Purchase of short-term investments			–			–			(9,807	)		(2,909	)
	Proceeds on sale of property, plant and equipment			691			–			691			–
	Purchases of property, plant and equipment			(611	)		–			(1,488	)		–
	Acquisition of income producing properties			(15,505	)		–			(15,505	)		–
	Acquisition of communications businesses			–			–			–			(17,884	)
	Acquisition of software sales and services business			–			–			–			(845	)
	Loans and mortgage – lending			–			–			(398	)		(7,210	)
	Loans and mortgage – repayments			250			279			250			646
	Discontinued operations			185			10,366			1,911			39,353

				(14,990	)		16,967			(24,846	)		15,655

Financing activities
	Note payable – repayment			–			(3,334	)		–			(10,000	)
	Mortgages and loans payable – borrowings			1,308			–			3			–
	Mortgages and loans payable – repayments			(921	)		(7,562	)		(1,024	)		(8,185	)
	Capital lease repayments			(616	)		(181	)		(1,937	)		(404	)
	Common shares purchased for cancellation			(556	)		–			(945	)		(2,055	)
	Retirement of debentures payable			–			–			–			(4,122	)
	Settlement of minority interest			–			–			(308	)		–
	Decrease in liability component of debenture payable			–			–			(1,282	)		–
	Discontinued operations			(20	)		–			7			–

				(805	)		(11,077	)		(5,486	)		(24,766	)

Increase (decrease) in cash and cash equivalents				(19,687	)		27,091			(10,515	)		(663	)
Cash and cash equivalents – beginning of period				33,796			24,466			24,624			52,220

Cash and cash equivalents – end of period			$	14,109		$	51,557		$	14,109		$	51,557

Supplemental disclosure of cash flow information:
Cash paid during the period
	Interest		$	990		$	959		$	3,750		$	4,006
	Income tax			10			–			69			(11	)
Equipment acquired under capital lease				–			723			–			9,723
Telecommunication shares acquired on exchange of investment				–			–			–			11,908
Mortgages assumed on acquisition of income producing properties				20,007			–			20,007			–

The accompanying notes are an integral part of these unaudited consolidated financial statements.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2002 (in 000’s of US dollars, except per share amounts) (unaudited)

1. Basis of presentation

The consolidated financial statements of Counsel Corporation (the “Company”) are prepared in accordance with accounting principles generally accepted in Canada and are presented in United States (“US”) dollars. These interim consolidated financial statements should be read in conjunction with the most recent audited annual financial statements, as at December 31, 2001, and the notes thereto. In the opinion of management, all adjustments considered necessary for a fair presentation of results for the periods reported have been included. The interim consolidated financial statements conform in all material respects to the requirements of generally accepted accounting principles for interim financial statements and accordingly do not contain all of the note disclosures found in annual financial statements. The interim consolidated financial statements follow the same accounting policies and methods of their application as the most recent audited annual financial statements, except as outlined in notes 2 and 3.

In regard to the adoption of new accounting requirements and the adoption of additional accounting policies pursuant to the Company’s entry into the real estate operating segment, as set out in Note 2, the Company’s accounting policies and its financial disclosures are substantially in accordance with the recommendations of the Canadian Institute of Public and Private Real Estate Companies (“CIPREC”).

Certain comparative figures have been reclassified to conform to the current period financial statement presentation.

2. Additional significant accounting policies

Real estate

The Company now operates a real estate segment pursuant to the acquisitions on July 3, and July 10 of income producing properties and a real estate property under development as described in note 7. The significant accounting policies adopted with respect to the new real estate segment are as follows:

(a) Revenue recognition

Rental income is recognized over the term of the lease as it is earned and collection is reasonably assured. Leases with tenants have been accounted for by the Company as operating leases as substantially all of the risks and benefits of ownership have been retained by the Company. Income producing property income includes percentage participating rent and recoveries of operating expenses.

(b) Depreciation

Depreciation on buildings is provided on the sinking fund basis over the useful lives of the properties to a maximum of 30 years. The sinking fund method provides for a depreciation charge of an annual amount increasing on a compounded basis of 5% per annum. Depreciation is determined in relation to each property’s carrying value, remaining estimated useful life and residual value.

(c) Asset valuation

Income producing properties are carried at the lower of depreciated cost and net recoverable amount. A write-down to net recoverable amount is recognized when a property’s undiscounted cash flows are less than its carrying value. Projections of future cash flows take into account the specific business plan for each property and management’s best estimate of the most probable set of economic conditions anticipated to prevail in the market. The use of net recoverable amount to assess the amount at which a property is carried in the accounts assumes the property will be held for the long term. Otherwise, the net realizable value method is used. Estimated net realizable value represents the estimated selling price reduced by any costs expected until final disposition, assuming reasonable market conditions.

Real estate property under development is carried at the lower of cost and net realizable value. The cost of real estate under development includes the acquisition cost of land, pre-development expenses, interest, realty taxes and other expenses directly related to the property.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2002 (in 000’s of US dollars, except per share amounts) (unaudited)

(d) Tenant improvements and inducements

Tenant improvements are deferred and amortized on a straight-line basis over the term of the respective lease.

(e) Maintenance and repair costs

Maintenance and repair costs are expensed against operations as incurred. Planned major maintenance activities, significant building improvements, replacements and major renovations, all of which improve or extend the useful life of the properties are capitalized and amortized over their estimated useful lives.

3. Recent accounting pronouncements

The Canadian Institute of Chartered Accountants (“CICA”) issued Handbook section 1581, “Business Combinations”, which requires the purchase method of accounting for business combinations initiated after June 30, 2001 and eliminates the pooling-of-interests method. The adoption of Handbook section 1581 effective January 1, 2002 did not have an impact on the Company’s consolidated financial statements.

Effective January 1, 2002, the Company adopted CICA Handbook section 3062, “Goodwill and Other Intangible Assets”. Section 3062 requires, among other things, the discontinuance of goodwill amortization. In addition, the section includes provisions, upon adoption, for the reclassification of certain existing recognized intangibles that were previously recorded as goodwill, reassessment of the useful lives of existing recognized intangibles and the testing for impairment of existing goodwill. As of June 30, 2002, the Company completed the assessment of the quantitative impact of the transitional impairment test on its goodwill and other intangible assets. An impairment of $1,000 was charged to retained earnings as of January 1, 2002 relating to the impaired goodwill of Sage Biopharma Inc. Section 3062 also requires that a reconciliation of loss from continuing operations and net loss excluding the impact of goodwill amortization be disclosed as follows:



	For the three months ended						For the nine months ended
	September 30						September 30


	2002			2001			2002			2001


Loss from continuing operations, as reported	$	(7,492	)	$	(11,126	)	$	(11,096	)	$	(35,783	)
Goodwill amortization expense		–			691			–			1,672

Loss from continuing operations, as adjusted	$	(7,492	)	$	(10,435	)	$	(11,096	)	$	(34,111	)

Adjusted loss per share from continuing operations	$	(0.37	)	$	(0.49	)	$	(0.60	)	$	(1.58	)



	For the three months ended						For the nine months ended
	September 30						September 30


	2002			2001			2002			2001


Net Loss, as reported	$	(8,360	)	$	(12,774	)	$	(13,213	)	$	(39,304	)
Goodwill amortization expense		–			691			–			1,672

Net loss, as reported	$	(8,360	)	$	(12,083	)	$	(13,213	)	$	(37,632	)

Adjusted net loss per share	$	(0.41	)	$	(0.56	)	$	(0.70	)	$	(1.73	)

Effective January 1, 2002, the Company adopted Section 3870 of the CICA Handbook, “Stock-based Compensation and Other Stock-based Payments”. Section 3870 addresses the recognition, measurement and disclosure of stock-based compensation and other stock-based payments made in exchange for goods and services. It sets out a fair value based method of accounting that is required for certain, but not all, stock-based transactions. The adoption of Handbook section 3870 did not have an impact on the Company’s consolidated financial statements. See note 6 for additional information related to stock-based compensation.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2002 (in 000’s of US dollars, except per share amounts) (unaudited)

Effective January 1, 2002, the Company adopted CICA revised Handbook section 1650, “Foreign Currency Translation” which requires the immediate recognition in income of the unrealized foreign currency exchange gains and losses on long-term monetary items with a fixed or ascertainable life as opposed to unrealized gains and losses being deferred and amortized over the remaining term of the long-term monetary items. The adoption of Handbook section 1650 did not have an impact on the Company’s consolidated financial statements.

4. Consolidated subsidiaries

The Company’s principal operating subsidiaries comprising continuing operations and its respective ownership interest in each subsidiary as at September 30, 2002 and December 31, 2001 are as follows:


	September 30		December 31
	2002		2001


Counsel Corporation (US)		100.0%		100.0%
Counsel Springwell Communications LLC		88.4%		88.4%
I-Link Incorporated (“I-Link”)		60.2%		60.2%
WorldxChange Corp. (“WorldxChange”)		60.2%		60.2%
Proscape Technologies, Inc. (“Proscape”)		(i)		56.5%
Sage Biopharma, Inc. (“Sage”)		(ii)		(ii)


(i)	During the three months ended March 31, 2002, the Company’s ownership interest in Proscape was significantly diluted and, as at the effective date of such dilution, the Company ceased to consolidate Proscape.

(ii)	During the three months ended September 30, 2002, the Company adopted a formal plan of disposal for Sage. Accordingly, Sage has being classified as a discontinued operation in these interim financial statements.

5. Income producing properties

Income producing properties comprise the following properties, the majority of which were acquired in the current quarter (see note 7):


		Leaseable		%				Accumulated		Net Book
Property	Location	Area (Sq.ft.)		Leased		Cost		Depreciation		Value


Portage Place	Peterborough, Ontario		221,467		95.30%	$	15,793	$	45	$	15,748
Southland Mall	Winkler, Manitoba		177,789		96.20%		5,956		15		5,941
Suncoast Mall	Goderich, Ontario		160,535		94.10%		6,352		18		6,334
Willowcreek Mall	Peterborough, Ontario		64,264		98.20%		3,818		10		3,808
Humboldt Mall	Humboldt, Saskatchewan		106,897		74.20%		953		3		950
1250 Steeles Ave. W.	Brampton, Ontario		45,733		100.00%		2,090		50		2,040

			776,685			$	34,962	$	141	$	34,821

6. Stock-based compensation

The Company applies the intrinsic value based method of accounting for its fixed employee stock compensation plan. Options are granted with an exercise price that is equal to the fair market price of the underlying stock at the date of the grant and accordingly, no compensation expense has been recognized. Had compensation expense been determined based on the fair value method at the grant dates for stock options granted on or after January 1, 2002, the Company’s results would have been as follows:


		Three months ended			Nine months ended
		September 30, 2002			September 30, 2002


Net loss:
	As reported	$	(8,360	)	$	(13,213	)
	Pro forma		(8,422	)		(13,409	)

Basic and diluted loss per share:
	As reported		(0.41	)		(0.70	)
	Pro forma		(0.41	)		(0.70	)

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2002 (in 000’s of US dollars, except per share amounts) (unaudited)

The fair value of each stock option has been determined on the date of the grant. The weighted average fair value of a stock option with an exercise price equal to the estimated market price of a common share on the date of the grant for the three-month and nine-month periods ended September 30, 2002 was approximately $1.83 and $1.96 respectively. The fair value of the stock options was determined using the Black-Scholes option-pricing model, based on the following assumptions:


	Three months ended		Nine months ended
	September 30, 2002		September 30, 2002


Risk free interest rate		5%		5%
Expected life	6-10 years		6-10 years
Expected volatility		60%		60%
Expected dividends		–		–

Because the Company expects to make additional stock option grants, the above pro forma disclosure is not representative of pro forma effects on the financial results to be reported for future periods.

7. Acquisitions

During the current quarter, the Company completed the acquisition of five income producing properties containing 730,952 sq. ft. of gross leaseable area and approximately 13 acres of vacant land zoned for retail development in Canada. “Real Estate” represents a new reporting segment effective this reporting period.

The purchase price amounted to $35,512 including closing adjustments of $1,040. These acquisitions were funded by the assumption of $20,007 of first mortgage debt on the properties and from cash reserves.

8. Discontinued operations

In May 2002, the Company settled the final payment due under the definitive agreement with the purchaser regarding its disposal of its pharmaceutical products business in 2001. During the course of the settlement, the purchaser disputed certain payments regarding inventories as set out in the agreement. The Company has assessed the impact of this dispute and has written down its receivable from the purchaser. The loss from discontinued operations includes an expense of $410 net of income tax recovery of $210 related to this item.

In the current quarter of 2002, the Company adopted a formal plan of disposal for its medical products business segment. Effective October 4, 2002, the Company disposed of its interest in Sage, incurring a loss on disposition of $463, which was recognized in the third quarter. In the second quarter of 2002, the Company completed its assessment of adopting CICA 3062 – “Goodwill and Other Intangible assets”; as a result the Company recorded a $1,000 impairment in the Goodwill of its investment in Sage. In accordance with the transitional provisions this amount was charged to retained earnings as at January 1, 2002.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2002 (in 000’s of US dollars, except per share amounts) (unaudited)

A summary of the operating results for the three and nine months ended September 30, 2002 and 2001 along with the carrying value of the assets and liabilities of discontinued operations as at September 30, 2002 and December 31, 2001 is as follows:



	For the three months						For the nine months
	ended September 30						ended September 30


	2002			2001			2002			2001


Revenue	$	963		$	906		$	3,035		$	2,747

Loss before income taxes to measurement date	$	(318	)	$	(1,648	)	$	(1,305	)	$	(3,521	)
Income taxes		–			–			–			–
Non-controlling interest		–			–			148			–

Loss from operations to measurement date		(318	)		(1,648	)		(1,157	)		(3,521	)
Loss subsequent to measurement date, net of income taxes of $ nil		(550	)		–			(960	)		–

Loss from discontinued operations	$	(868	)	$	(1,648	)	$	(2,117	)	$	(3,521	)


	September 30		December 31
	2002		2001


ASSETS
Cash	$	378	$	733
Accounts receivable		1,149		4,855
Capital assets		944		1,335
Goodwill		470		1,933
Other assets		724		822

Total assets		3,665		9,678

LIABILITIES
Accounts payable and accruals		2,191		3,061
Minority interest		233		702

Total liabilities		2,424		3,763

Discontinued net assets	$	1,241	$	5,915

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2002 (in 000’s of US dollars, except per share amounts) (unaudited)

9. Mortgages and loans payable

The following table is a summary of outstanding mortgage and loan obligations:

Effective

Maturity

Interest

Total

Current

Long-term

Currency

Date

Rate

Cdn

Portion

Erie Glen Manor

Cdn

Sep. 01/05

8.55%

4,458

2,810

2,752

Hawthorn Park

Cdn

Feb. 10/06

7.93%

7,688

4,846

102

4,744

Hudson Manor

Cdn

Sep. 01/05

8.55%

908

572

560

Maple City Residence

Cdn

Sep. 01/05

8.55%

932

588

575

Metcalfe Gardens

Cdn

Sep. 01/05

8.55%

4,600

2,900

2,839

Portage Place

Cdn

Mar. 1/08

7.04%

13,685

8,627

369

8,258

Southland Mall

Cdn

Sep. 01/08

7.84%

7,101

4,476

135

4,341

Suncoast Mall

Cdn

Feb. 01/08

7.10%

6,167

3,888

167

3,721

Willowcreek Mall

Cdn

Dec. 01/09

8.28%

5,283

3,331

3,255

1250 Steeles Ave W

Cdn

Demand

Prime+1%

2,712

1,710

1,702

Canadian $ denominated debt

53,534

33,748

1,001

32,747

Corporate debenture

Nov. 15/06

8.50%

308

297

WorldxChange credit line

Demand

6.00%

6,999

–

WorldxChange loan

July. 1/04

10.00%

450

235

215

I-Link loans

Demand

Nil

2,746

–

US $ denominated debt

10,503

9,991

512

Total

44,251

10,992

33,259

10. Contingent liability

I-Link, a subsidiary of the Company, had been engaged in legal proceedings with Red Cube International AG (“Red Cube”). On July 9, 2002, an evidentiary hearing was held before a panel of arbitrators of the American Arbitration Association (“AAA”) and an award was issued in favor of I-Link effective October 7, 2002. The AAA panel dismissed all of Red Cube’s claims with prejudice and determined that it was Red Cube that had breached the agreements between the parties. The arbitration panel awarded I-Link $6.7 million in damages against Red Cube. I-Link has recorded a valuation allowance of $6.7 million to reflect uncertainty associated with collectibility of the award. The amounts awarded will be recorded as income of the Company when payment is received.

11. Segmented reporting

The Company operates in four distinguishable operating segments: communications, long distance (previously termed dial around), real estate and seniors living.

In the third quarter of 2002, the Company adopted a formal plan of disposal for Sage (medical products segment) and ceased reporting its results on a segmented basis. The Company also entered a new reportable segment, real estate, being the operation of income producing properties and the development of properties for ultimate disposition.

In the first quarter of 2002, the Company’s ownership in Proscape was significantly diluted. As at the effective date of such dilution, the Company ceased consolidation and reporting technology as a distinguishable segment. In the segmented information provided below, the former technology segment has been included in the corporate segment to the date of de-consolidation.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2002 (in 000’s of US dollars, except per share amounts) (unaudited)

For the three months ended September 30, 2002:

Communi-

Long

Real

Seniors

cations

Distance

Estate

Living

Corporate

Total

Revenues

Canada

–

1,486

7,977

–

9,463

United States

2,213

19,643

–

102

–

21,958

2,213

19,643

1,486

8,079

–

31,421

Cost of revenues

1,665

10,768

–

12,433

Selling, general and administration

1,528

6,234

502

7,975

3,418

19,657

Research and development

317

–

317

Provision for doubtful accounts

1,119

–

1,137

Depreciation and amortization

637

967

104

152

671

2,531

Operating income (loss)

(1,952

)

555

880

(48

)

(4,089

)

(4,654

)

Gains and other income:

Short term investments

–

224

Other

–

1,569

–

1,569

Impairments and other losses:

Short term investments

–

1,201

Portfolio investments

–

640

Property, plant and equipment

266

1,070

–

1,336

Operating income (loss) adjusted for other gains/ losses

(2,218

)

1,054

880

(48

)

(5,706

)

(6,038

)

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2002 (in 000’s of US dollars, except per share amounts) (unaudited)

For the three months ended September 30, 2001:


		Communi-			Long			Real		Seniors
		cations			Distance			Estate		Living			Corporate			Total


Revenues
	Canada	$	–		$	–		$	–	$	7,626		$	36		$	7,662
	United States		5,638			21,488			–		339			225			27,690

			5,638			21,488			–		7,965			261			35,352
Cost of revenues			7,408			15,581			–		–			309			23,298
Selling, general and administration			4,052			6,016			–		7,829			2,295			20,192
Research and development			434			–			–		–			–			434
Provision for doubtful accounts			106			1,172			–		–			–			1,278
Depreciation and amortization			2,566			1,149			–		207			431			4,353

Operating income (loss)			(8,928	)		(2,430	)		–		(71	)		(2,774	)		(14,203	)
Gains and other income:
	Short term investments		–			–			–		–			26,861			26,861
	Property, plant and equipment		–			–			–		3,373			–			3,373
Impairments and other losses:
	Impairment of goodwill		8,040			–			–		–			–			8,040
	Portfolio investments		–			–			–		–			8,500			8,500

Operating income (loss) adjusted for other gains/ losses		$	(16,968	)	$	(2,430	)	$	–	$	3,302		$	15,587		$	(509	)


	Communi-		Long		Real		Seniors
	cations		Distance		Estate		Living		Corporate		Total


Assets by Segment
September 30, 2002	$	17,798	$	26,503	$	38,770	$	22,712	$	29,038	$	134,821

December 31, 2001	$	23,909	$	32,206	$	2,433	$	23,112	$	52,532	$	134,192

September 30, 2001	$	41,694	$	18,895	$	—	$	23,213	$	87,971	$	171,773

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2002 (in 000’s of US dollars, except per share amounts) (unaudited)

For the nine months ended September 30, 2002

Communi-

Long

Real

Seniors

cations

Distance

Estate

Living

Corporate

Total

Revenues

Canada

–

1,639

23,499

802

25,940

United States

8,249

62,754

–

290

188

71,481

8,249

62,754

1,639

23,789

990

97,421

Cost of revenues

6,668

35,627

–

258

42,553

Selling, general and administration

7,235

20,067

502

23,387

7,900

59,091

Research and development

1,164

–

1,164

Provision for doubtful accounts

107

3,726

–

3,833

Depreciation and amortization

3,869

2,924

104

462

1,389

8,748

Operating income (loss)

(10,794

)

410

1,033

(60

)

(8,557

)

(17,968

)

Gains and other income:

Short term investments

–

27,724

Other

–

1,569

–

1,569

Impairments and other losses:

Short term investments

–

3,992

Portfolio investments

–

640

Property, plant and equipment

2,130

1,070

–

3,200

Operating income (loss) adjusted for other gains/ losses

(12,924

)

909

1,033

(60

)

14,535

3,493

For the nine months ended September 30, 2001


		Communi-			Long			Real		Seniors
		cations			Distance			Estate		Living			Corporate			Total


Revenues
	Canada	$	–		$	–		$	–	$	22,610		$	474		$	23,084
	United States		16,789			27,420			–		1,017			764			45,990

			16,789			27,420			–		23,627			1,238			69,074
Cost of revenues			17,766			21,193			–		–			803			39,762
Selling, general and administration			9,623			7,157			–		23,270			7,428			47,478
Research and development			1,315			–			–		–			–			1,315
Provision for doubtful accounts			1,392			1,172			–		–			–			2,564
Depreciation and amortization			5,869			1,477			–		626			1,087			9,059

Operating income (loss)		$	(19,176	)	$	(3,579	)	$	–	$	(269	)	$	(8,080	)	$	(31,104	)
Gains and other income:
	Short term investments		–			–			–		–			37,759			37,759
	Portfolio investments		–			–			–		–			64			64
	Property, plant and equipment		–			–			–		3,373			–			3,373
Impairments and other losses:
	Write-down of investment		–			–			–		–			7,036			7,036
	Impairment of goodwill		8,040			–			–		–			–			8,040
	Portfolio investments		–			–			–		–			10,333			10,333

Operating income (loss) adjusted for other gains/ losses		$	(27,216	)	$	(3,579	)	$	–	$	3,104		$	12,374		$	(15,317	)

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2002 (in 000’s of US dollars, except per share amounts) (unaudited)

12. Loss per share disclosures

The following is a reconciliation of the numerators and denominators used in computing basic loss per share from continuing operations.



	For the three months						For the nine months


	ended September 30 ended September 30
	2002			2001			2002			2001


Basic loss per share:
Numerator:
Loss from continuing operations	$	(7,492	)	$	(11,126	)	$	(11,096	)	$	(35,783	)
Accretion of equity component of debenture payable		(756	)		(790	)		(2,270	)		(2,369	)

Loss available to common shareholders	$	(8,248	)	$	(11,916	)	$	(13,366	)	$	(38,152	)

Denominator:
Weighted average common shares outstanding (000’s)		22,149			22,903			22,247			23,088

Basic loss per share from continuing operations	$	(0.37	)	$	(0.52	)	$	(0.60	)	$	(1.65	)

Numerator:
Net loss	$	(8,360	)	$	(12,774	)	$	(13,213	)	$	(39,304	)
Accretion of equity component of debenture payable		(756	)		(790	)		(2,270	)		(2,369	)

Loss available to common shareholders	$	(9,116	)	$	(13,564	)	$	(15,483	)	$	(41,673	)

Denominator:
Weighted average common shares outstanding (000’s)		22,149			22,903			22,247			23,088

Basic loss per share from net loss	$	(0.41	)	$	(0.59	)	$	(0.70	)	$	(1.80	)

Diluted share loss information is not provided, as the result is anti-dilutive since the Company is in a loss position.

13. Subsequent events

Effective October 4, 2002, the Company disposed of its 90.4% interest in Sage for net proceeds approximating $1,365.

On October 15, 2002 the Company and I-Link, its 60.4% owned subsidiary, entered into an Amended and Restated Debt Restructuring agreement (“Amended Agreement”), which amended a July 25, 2002 Agreement. The Amended Agreement was approved by the I-Link board of directors on October 29, 2002. Closing of the Agreement is to take place within three days after obtaining shareholder approval of certain corporate proposals which is expected to occur in the first quarter of 2003. The principal terms of the Amended Agreement are that principal and accrued interest of $26,591 owed by I-Link to the Company will be exchanged into common stock of I-Link at $0.18864 per share (representing the average closing price of I-Link’s common stock during May 2002). This will result in the issuance of 140,962,770 shares of I-Link common stock upon closing, and the Company’s equity position becoming 76.1%. The Company has made a commitment to fund I-Link as required until April 30, 2003, through long-term inter-company advances or equity contributions. In addition, the Company will fund the operations of I-Link through the date of adoption of an operating plan, which is yet to be adopted by the I-Link board of directors. The Company will reimburse I-Link for all costs, fees and expenses, in connection with the Agreement and Amended Agreement.

CORPORATE AND SHAREHOLDER INFORMATION

CORPORATE INFORMATION

COUNSEL CORPORATION

The Exchange Tower

Suite 1300, P.O. Box 435

130 King Street West

Toronto, Ontario M5X 1E3

Tel: 416 866 3000

Fax: 416 866 3061

Website: www.counselcorp.com

COUNSEL SPRINGWELL

COMMUNICATIONS LLC

One Landmark Square, Suite 320

Stamford, Connecticut 06901

Tel: 203 961 9000

Fax: 203 961 9001

Website: www.counselspringwell.com

SHAREHOLDER INFORMATION

AUDITORS

PricewaterhouseCoopers LLP

Chartered Accountants

TRANSFER AGENTS

& REGISTRARS

Computershare Trust Company of Canada

Tel: 416 981 9500

Computershare Trust Company Inc.

Tel: 303 984 4034

CAPITAL STOCK

& CONVERTIBLE DEBENTURES

At September 30, 2002, there were 22,001,000 common
shares (21,904,000 at October 31, 2002) and $42,761,000
of convertible debentures outstanding.

STOCK & DEBENTURE LISTING

Counsel Corporation’s common shares are

listed on The Toronto Stock Exchange under

the symbol CXS and on The NASDAQ Stock

Market under the symbol CXSN. Its convertible

debentures are listed on The Toronto Stock

Exchange under the symbol CXS.DB.U

SHAREHOLDER

& INVESTOR CONTACT

STEPHEN WEINTRAUB

Senior Vice President & Secretary

Tel: 416 866 3058

Fax: 416 866 3061

E-mail: saw@counselcorp.com

ABOUT COUNSEL CORPORATION

Counsel Corporation (TSE:CXS/NASDAQ:CXSN) is a dynamic, diversified company focused on acquiring and building businesses using its financial and operational expertise in three specific sectors: communications, real estate and seniors living. Counsel’s communications platform, Counsel Springwell Communications LLC, is focused on building upon its existing communications investments, I-Link Incorporated and WorldxChange Corp., through organic growth and by acquiring substantial additional customer revenues. I-Link (OTC:ILNK.OB; www.I-Link.com) is an enhanced Internet Protocol voice and data communications service provider, and WorldxChange (www.worldxchange.com) is an international and domestic long distance service provider. Counsel’s real estate platform has a focused strategy of investing in and developing income-producing commercial properties, primarily retail shopping centres. Counsel’s seniors living platform owns five retirement homes in Canada and three nursing homes in the United States, and leases seven nursing homes in Canada.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		Registrant:

		Counsel Corporation



		By:		/s/ Allan C. Silber
				Name: Allan C. Silber Title: Chief Executive Officer

		Date:		December 3, 2002

COUNSEL CORP 6-K