Coventree Reports First Quarter 2011 Financial Results

NEX Symbol: COF.H 

TORONTO, Feb. 14 /CNW/ - Coventree Inc. (NEX: COF.H) ("Coventree" or the "Company") today announced its financial results for the three months ended December 31, 2010. All amounts are reported in Canadian dollars.

Coventree's net loss for the three months ended December 31, 2010 was $3.3 million, compared to a net loss of $1.4 million for the same period in the previous year.

Total revenue for the three months ended December 31, 2010 was $0.3 million, which was the same as total revenue for the same period in the previous year.  The Company's primary source of revenue was interest income from investments.

Operating expenses for the three months ended December 31, 2010 were $3.0 million, which represents an increase of $1.5 million compared to the same period in the previous year. This increase is a result of, among other things, a $1.9 million increase in legal and consulting fees related to the Ontario Securities Commission ("OSC") hearing that commenced earlier in 2010, offset by small decreases in both compensation and benefits expenses and administration expenses, as the Company continues to wind down its operations.  Legal and consulting fees related to the OSC hearing for the three months ended December 31, 2010 were $2.6 million, compared to $0.7 million in the same period in the previous year.

For the three months ended December 31, 2010, there was a $0.6 million unrealized pre-tax loss on the Company's investment in shares of Xceed Mortgage Corporation compared to an unrealized pre-tax loss of $0.1 million for the three months ended December 31, 2009.

The Company's Management Discussion and Analysis and unaudited consolidated financial statements for the three months ended December 31, 2010 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 with its previously announced plans to wind down the Company and its operations. In that regard, at the Company's annual and special meeting of shareholders on June 30, 2010, shareholders approved a special resolution authorizing the winding up of the Company and the distribution of its remaining assets, if any, to shareholders.  The winding up of the Company will commence and become effective at a time to be determined by the Company's board of directors.  The board intends to set the effective date as promptly as practicable following the final determination of the OSC proceeding.  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 at this time. A number of factors, some of which are beyond the Company's control, will affect the timing of, or the amount of funds available for distribution upon, a formal winding up of the Company, including the timing and outcome of the decision to be issued by the OSC in respect of the hearing described above.  A final determination of the OSC proceeding is the principal matter to be resolved prior to the implementation by the Company of its winding up and the distribution of its remaining assets.  In that regard, the OSC hearing ended on December 9, 2010, and the OSC reserved its decision at that time.  There can be no assurance as to when the OSC will issue its decision in the matter. 

Forward-Looking Statements

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. These statements can be identified by the expressions "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 10 to 12 of the Company's Management Discussion and Analysis for the three months ended December 31, 2010 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. 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.

This press release is intended for distribution in Canada only.

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:

Craig Armitage, The Equicom Group Inc.
Tel: (416) 815-0700 x278
Email: carmitage@equicomgroup.com
- or -
Ani Hotoyan-Joly, Coventree Inc.
Tel: (416) 572-2721
Email:  ani@coventree.ca

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Coventree Inc.

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