Exhibit 2.02

Robert Foney, Chief Marketing Officer

781 ###-###-####

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Lynnfield, Mass. (August 14, 2012) – Investors Capital Holdings, Ltd. (NYSE Amex: ICH, the “Company”), a financial services holding company, posted first quarter net income of $0.26 million on total revenue of $20.80 million for the period ended June 30, 2012 (the “quarter end”). Specific expense reduction initiatives implemented during the fourth quarter of the prior fiscal year translated into reduced operating costs across nearly all expense-related categories, resulting in both operating and net income in the first quarter of the new fiscal year. Investors Capital Holdings, Ltd. operates primarily through its wholly-owned subsidiary, Investors Capital Corporation (“ICC”), a dually registered broker-dealer and investment advisory firm.

Total revenue decreased 3.0% to $20.80 million compared to revenue of $21.44 million for the quarter ended June 30, 2011 (the “prior period”). The decline was due to a reduction in commission revenue, which accounts for 77.3% of total revenue. Commission revenue fell 4.9% to $16.09 million, compared to $16.92 million in the prior period, due to lower trading volume resulting from cautious investor sentiment brought on by fluctuating, uncertain market conditions. Advisory fees, which comprise 19.8% of total revenue, remained fairly consistent with the prior period, declining 1.7% to $4.11 million, compared to $4.18 million in the prior period.

Total expenses fell $1.91 million or 8.6%, declining in every expense-related category, resulting in operating income of $0.45 million compared to an operating loss of $0.82 million for the prior period and net income of $0.26 million for the quarter compared to a net loss of $1.26 million for the prior period. Net profit was the result of decreases in the Company’s core expense run rate from cost-management opportunities along with completion of non-recurring expenses related to the S-3 offering filed in the prior period.

 

Investors Capital continues to benefit from enhancing the overall quality of its representatives by providing broad practice management solutions to assist its advisors in growing their practices and recruiting established, high-performing representatives. The firm’s average revenue per representative, based on a rolling 12-month period, rose at the end of the first quarter to $169,934, an increase of 5.6% over $160,943 for the prior rolling 12-month period.

Adjusted EBITDA was $0.58 million compared to negative $0.35 million for the prior period. Adjusted EBITDA, a non-GAAP financial measure described below, is a key metric utilized by the firm in evaluating its financial performance.

“I am excited that we were able to return to profitability while sustaining our recruiting efforts, technology initiatives, practice management program, and addressing growing compliance requirements,” said Timothy B. Murphy, President and CEO of Investors Capital Holdings, Ltd. “Despite the ongoing challenges in the current marketplace, our steadfast focus continues to be executing our strategy of growing top-line revenues and increasing profitability, while delivering 5-Star Service to our advisors every day.”

Murphy adds: “Most importantly, I’m proud of the teamwork, solidarity, and esprit de corps displayed by our home office staff, advisors, and board of directors over the past year in getting to this point. I draw my confidence from the well of their conviction.”

 

Investors Capital Holdings, Ltd. (NYSE Amex: ICH) of Lynnfield, Massachusetts is a financial services holding company that operates primarily through its broker/dealer and investment advisor subsidiary, Investors Capital Corporation. Our mission is to provide 5-Star Service and support to our valued registered representatives, including advisory programs, strategic practice management and marketing services, and transformational technology, to help them grow their businesses and exceed their clients’ expectations. Business units include Investors Capital Corporation, ICC Insurance Agency, Inc., and Investors Capital Holdings Securities Corporation. For more information, please call ###-###-#### or visit www.investorscapital.com.

Investors Capital Holdings, Ltd., 230 Broadway, Lynnfield, Massachusetts 01940, Distributor.

 

 

Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted by eliminating items that we believe are not part of our core operations, are non-recurring items of revenue or expense, or do not involve a cash outlay, such as stock-related compensation.  We consider adjusted EBITDA important in monitoring and evaluating our financial performance on a consistent basis across various periods. We also use adjusted EBITDA as a primary measure, among others, to analyze and evaluate financial and strategic planning decisions.

Adjusted EBITDA is considered a non-GAAP financial measure as defined by Regulation G promulgated by the SEC under the Securities Act of 1933, as amended.  Adjusted EBITDA should be considered in addition to, rather than as a substitute for, important GAAP financial measures including pre-tax income, net income and cash flows from operating activities.  Items excluded from adjusted EBITDA are significant and necessary components to the operations of our business; therefore, adjusted EBITDA should only be used as a supplemental measure of our operating performance.

Adjusted EBITDA is reconciled with GAAP net income as follows: