/THIS PRESS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY./
NEX Symbol: COF.H
TORONTO, Feb. 25 /CNW/ - Coventree Inc. (NEX: COF.H) ("Coventree" or the "Company") today announced its financial results for the three months ended December 31, 2009. All amounts are reported in Canadian dollars.
Total revenue for the three months ended December 31, 2009 of $0.3 million decreased by $3.0 million compared to the three months ended December 31, 2008. The decrease is primarily because the Company has discontinued its operations. The principal source of revenue for Q1 2010 was interest income, whereas the Company continued to receive financial and administration agent fees during Q1 2009.
Operating expenses for Q1 2010 were $1.5 million, a decrease of $2.8 million compared to the same period in the previous year. Most of the decrease is due to lower compensation and benefits expenses as the Company now has fewer employees. Expenses for the Q1 2010 included $0.7 million in costs associated with the investigation and related proceedings commenced by Ontario Securities Commission ("OSC") staff during the quarter.
Coventree's net loss for Q1 2010 was $1.4 million, compared to a net loss of $1.6 million for Q1 2009.
The Company's Management Discussion and Analysis and unaudited consolidated financial statements for the three months ended December 31, 2009 will be available under the "Coventree Owners" section of the Company's website at www.coventree.ca and on SEDAR at www.sedar.com.
Coventree is continuing to proceed with its previously announced plans to wind down the Company and its operations. In that regard, the Company has called an annual and special meeting of shareholders to be held on June 30, 2010 at which shareholders will be asked to approve, among other matters, a special resolution authorizing the winding up of the Company and the distribution of its remaining assets, if any, to shareholders. However, the timing of any formal winding up of the Company and the amount and timing of any distribution of funds to shareholders under such a winding up cannot be determined. A number of factors, some of which are beyond the Company's control, could affect the timing of, or the amount of funds available for distribution upon, a formal winding up of the Company.
On December 7, 2009, OSC staff commenced proceedings against the Company and one current and one former officer. The notice of hearing and statement of allegations (collectively, the "Notice of Hearing") are available on the OSC's website at www.osc.gov.on.ca, and a summary of the principal allegations and orders sought by the OSC staff is set out in the Company's Management Discussion and Analysis for the first quarter ended December 31, 2009 under "OSC Proceedings". Coventree expects that the hearing into the matters set out in the Notice of Hearing will be held commencing in May of this year. As a result of the proceedings commenced by the Notice of Hearing, the Company will incur additional legal and other expenses, and may be required to pay fines, monetary penalties and/or costs, which could be substantial. Further, the Company may be obligated to indemnify the individuals named in the Notice of Hearing for any legal and other expenses, including any fines, monetary penalties and/or costs, which such individuals may incur or be required to pay in connection with the OSC proceedings. Accordingly, the formal proceedings commenced by OSC staff pursuant to the Notice of Hearing could result in a significant reduction in the amount of funds available to be distributed to shareholders and/or a significant delay in the timing of any such distribution. While Coventree has agreed with OSC staff that it will not make or pay any dividend or other distribution to Coventree's shareholders generally without first providing at least 45 days' prior written notice to OSC staff, Coventree currently does not intend to make any dividend or other distribution to its shareholders prior to the completion of the OSC hearing.
This press release includes certain forward-looking statements relating to the Company's expectations to wind down its operations and to implement a formal winding up of the Company and its intention not to make any dividend or other distribution to its shareholders prior to the completion of the OSC hearing. These statements can be identified by the expressions "expects", "will" and "intends". These forward-looking statements are not historical facts but reflect Coventree's current expectations regarding future events based on information currently available to Coventree.
These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions which may be substantial. Many factors could cause actual results or events to differ materially from current expectations that may be expressed or implied by such forward-looking statements, including, without limitation, the various matters discussed under "Risks and Uncertainties" contained on pages 12 to 14 of the Company's Management Discussion and Analysis for the first quarter ended December 31, 2009 which is available under the Company's profile on SEDAR at www.sedar.com. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, the Company may not be able to wind down its operations or implement a formal winding up of the Company in the near future or at all; the amount of funds available to be distributed to shareholders pursuant to such a winding up could be significantly reduced and/or the timing of the distribution of such funds could be significantly delayed; and the Company's expectation relating to the timing of future dividends or other distributions to shareholders may change. These factors should be considered carefully and prospective investors should not place undue reliance on the forward-looking statements. These forward-looking statements are made as of the date of this press release and Coventree does not intend, and does not assume any obligation, to update or revise these forward-looking statements, except as required by law.
Neither TSX Venture Exchange nor it Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Coventree Inc.
For further information: For further information: Craig Armitage, The Equicom Group Inc., Tel: (416) 815-0700 x278, Email: email@example.com; or Ani Hotoyan-Joly, Coventree Inc., Tel: (416) 572-2721, Email: firstname.lastname@example.org