MARKHAM, ON, Jan. 12 /PRNewswire-FirstCall/ - Nuvo Research Inc. today reported that it has completed the closing of the previously announced sale of its Markham head office for $2.9 million. The Company will lease back the current head office until March 2006 when it will move to smaller, more cost- efficient, leased premises in Mississauga, Ontario. The new arrangement will result in annual operating savings of approximately $500,000.
The Company has also reached an agreement with the court appointed liquidator of Leadenhall Bank & Trust Company to settle litigation between Leadenhall and Nuvo relating to the amount owing under a $2 million mortgage over the Markham head office. Leadenhall had claimed that the mortgage interest rate was 2% per month or over 24% per year. The settlement calls for payment based on a 5% annual interest rate retroactive to the original mortgage date of July 18, 2003. The agreement is subject to the approval of the Bahamian court that appointed the Leadenhall liquidator.
On closing the sale, Nuvo received $1.1 million of net cash proceeds. An additional $350,000 will be released to Nuvo from escrow upon court approval of the settlement agreement. The approval is expected by the end of February 2006. If the court does not approve the settlement, the litigation between Leadenhall and Nuvo will continue and the escrowed funds will not be released until the courts deal with the matter.
“We are pleased that we have been able to reach a settlement with Leadenhall’s liquidator and sell our head office,” said John London, Nuvo’s Vice Chairman. “This allows us to reduce our operating costs and redeploy capital that had been tied up in real estate to drug development - which is our core business.”
About Nuvo Research Inc.
Nuvo is focused on developing innovative therapeutics that are delivered transdermally using the Company’s skin-penetrating technologies. Nuvo’s lead product is Pennsaid(R), a topical non-steroidal anti-inflammatory (NSAID) used for the treatment of osteoarthritis. Nuvo intends to leverage its skin- penetrating technologies to create a portfolio of transdermal products targeting a variety of indications.
Nuvo Research Inc. is a publicly traded, Canadian pharmaceutical company headquartered in Markham, Ontario, with manufacturing facilities in Varennes, Quebec and Wanzleben, Germany. For more information, please visit www.nuvoresearch.com.
This release may contain forward-looking statements, subject to risks and uncertainties beyond management’s control. Actual results could differ materially from those expressed here. Risk factors are discussed in the Company’s annual information form filed with the securities commissions in each of the provinces of Canada. The Company undertakes no obligation to revise forward-looking statements in light of future events.
Nuvo Research Inc.
CONTACT: Lynn Riley, Manager, Investor Relations & CorporateCommunications, Nuvo Research Inc., (905) 415-1446, info@nuvoresearch.com;Investor Relations: Christina Bessant, Equicom Group Inc., (416) 815-0700x269, cbessant@equicomgroup.com; Archived images on this organization aresearchable through CNW Photo Archive website at http://photos.newswire.ca.Images are free to accredited members of the media. To request a free copyof this organization’s annual report, please go to http://www.newswire.caand click on Tools for Investors.
