Medwell Capital Reports 2011 Year-end Results

EDMONTON, March 21, 2012 /CNW/ - Medwell Capital Corp. (TSX-V: MWC) today announced financial and operational results for the year ended December 31, 2011.

2011 Highlights:

• Net income from continuing operations for Q4 2011 of $0.9 million.
• Restructuring efforts have substantially reduced costs and increased contract revenues
• Completed an arrangement agreement ("Arrangement") to invest $10 million in Spectral Diagnostics Inc. ("Spectral") and distribute approximately 54.3 million Common shares of Spectral to Medwell shareholders
• Invested a total of $2 million in Mimetogen Pharmaceuticals Inc. ("Mimetogen") during the year. Mimetogen announced positive efficacy and safety data from its Phase II clinical trial of MIM-D3 for dry eye disease

"During 2011 we made substantial investments in two late stage healthcare technologies and undertook some major reorganization efforts aimed at spinning out value to our shareholders and improving income from operations." said Kevin Giese, President and CEO of Medwell. "We are pleased that in the fourth quarter net income from continuing operations totaled just under $1million, as a reflection of these efforts and improvement in our investments."

Financial Results:

The consolidated net loss from continuing operations of the Corporation for the year ended December 31, 2011, was $11.0 million or $0.12 per share compared with a consolidated net loss from continuing operations of $8.0 million or $0.09 per share for the same period in the previous year.  The results for the year ended December 31, 2011, included the recognition of a realized loss on investments of $4.1 million on the Corporation's investment in Spectral and expenditures of $0.6 million for the Arrangement, as well as $1.7 million in contract services revenue.

The Corporation recorded an unrealized loss of $0.6 million (2010 - $0.3 million) for the year ended December 31, 2011.  The movement is due to changes in the fair value of the Corporation's investments.

A realized loss of $4.1 million was recognized for the year ended December 31, 2011 as a result of the distribution of 54,282,834 Spectral Shares to the Medwell shareholders.The amount is the difference between the carrying amount of the investment in the distributed Spectral shares and the fair market value of those shares on September 9, 2011.

Revenue earned from services agreements in the amount of $1.7 million (2010 - $1.2 million) for the year ended December 31, 2011.  Included in contract services revenue is $1.5 million (2010 - $1.2 million) representing the agreement with Spectral.

Total consolidated expenses from continuing operations for the year ended December 31, 2011, were $8.0 million as compared with $8.9 million in the year ended December 31, 2010.

At December 31, 2011, cash and cash equivalents, restricted cash and short-term investments totaled $6.5 million as compared to $27.5 million at December 31, 2010.  At December 31, 2011, the Corporation had working capital of $6.3 million as compared to $26.1 million at December 31, 2010.  The Corporation has sufficient working capital to meet its obligations as they come due.

As at December 31, 2011 there were 91,008,923 Common shares of the Company issued and outstanding.

About Medwell Capital Corp.

Medwell Capital Corp. is a Canadian-based investment and advisory firm. For further information please visit www.medwellcapital.com.

Neither TSX Venture Exchange nor its 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.  This press release may contain forward-looking statements, which reflect the Company's current expectation regarding future events.  These forward-looking statements involve risks and uncertainties that may cause actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements.  Such factors include, but are not limited to, changing market conditions, the successful and timely completion of clinical studies, the establishment of corporate alliances, the impact of competitive products and pricing, new product development, uncertainties related to the regulatory approval process and other risks detailed from time to time in the Corporation's ongoing quarterly and annual reporting.  We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Medwell Capital Corp. Consolidated Statements of Financial Postion
(expressed in thousands of Canadian dollars)
												December 31, 2011 $				December 31, 2010 $				January 1, 2010 $
Assets
Cash and cash equivalents												4,339				24,841				48,656
Investments												7,875				12,507				-
Restricted cash												2,210				2,665				453
Short-term investments												-				5				2,327
Accounts receivable												334				397				775
Prepaid expenses												149				235				112
Property and equipment												23				84				350
												14,930				40,734				52,673
Liabilities
Accounts payable and accrued liabilities												424				1,595				5,052
Shareholders' Equity
Share capital												162,144				175,714				175,714
Contributed surplus												12,883				12,319				10,937
Deficit												(160,521)				(148,894)				(139,030)
												14,506				39,139				47,621
												14,930				40,734				52,673

Medwell Capital Corp. Consolidated Statements of Operations and Comprehensive Loss
(expressed in thousands of Canadian dollars and shares, except per share amounts)
												Years ended December 31,
												2011 $				2010 $
Revenue Contract services												1,654				1,150
Change in fair value of investments												4,650				236
Operating, general and administrative												7,807				7,260
Stock-based compensation												449				1,382
Depreciation of property and equipment												33				125
Loss on disposal of property and equipment												4				173
Foreign exchange (gain) loss												(96)				249
Interest earned												(149)				(234)
												12,698				9,191
Loss from continuing operations												(11,044)				(8,041)
Loss from discontinued operation												(583)				(1,823)
Loss and comprehensive loss for the year												(11,627)				(9,864)
Basic and diluted loss per common share - continuing operations												(0.12)				(0.09)
Basic and diluted loss per common share - discontinued operation												(0.01)				(0.01)
Basic and diluted loss per common share												(0.13)				(0.10)
Basic weighted average number of common shares outstanding												91,009				91,009
Diluted weighted average number of common shares outstanding												91,009				91,009

Medwell Capital Corp. Interim Consolidated Statements of Cash Flows
(expressed in thousands of Canadian dollars)
												Years ended December 31,
												2011 $				2010 $
Cash provided by (used in)
Operating activities
Net loss from continuing operations												(11,044)				(8,041)
Purchase of investments												(13,741)				(13,000)
Proceeds from disposal of investments												152				272
Transfer from (to) restricted cash												455				(2,212)
Net proceeds from short-term investments												5				2,322
Items not involving cash
	Unrealized loss (gain) on investments											604				275
	Realized (gain) loss on investments											4,046				(39)
	Stock-based compensation											449				1,382
	Depreciation of property and equipment											33				125
	Loss on disposal of property and equipment											4				173
	Unrealized foreign exchange gain (loss)											(39)				177
												(19,076)				(18,566)
Net change in non-cash working capital items												(223)				(401)
												(19,299)				(18,967)
Investing activities
Purchase of property and equipment												-				(7)
												-				(7)
Foreign exchange gain (loss) on cash and cash equivalents held in foreign currency												39				(177)
Cash used in continuing operations												(19,260)				(19,151)
Cash used in discontinued operation												(1,242)				(4,664)
Decrease in cash and cash equivalents												(20,502)				(23,815)
Cash and cash equivalents - Beginning of year												24,841				48,656
Cash and cash equivalents - End of year												4,339				24,841
Cash and cash equivalents consist of:
Bank accounts												2,463				3,348
Interest bearing deposits and securities												1,876				21,493
												4,339				24,841
Supplemental cash flow information
Income taxes paid												$     -				$     -
Interest paid												-				-

 

Tony Hesby

Medwell Capital Corp.
780-413-7152
780-408-3040 Fax
E-mail: [email protected]
Internet: http://www.medwellcapital.com 

Ross Marshall
Investor Relations
416-815-0700 ext. 238
416-815-0080 Fax
E-mail:[email protected]