Medwell Capital reports 2012 first quarter results

EDMONTON, May 29, 2012 /CNW/ - Medwell Capital Corp. (TSXV: MWC) today announced financial and operational results for the first quarter ended March 31, 2012.

First Quarter Highlights:

-		Subsequent to the end of the quarter, Mimetogen Pharmaceuticals presented its positive Phase II data for MIM-D3 in dry eye disease at the Annual Meeting of the Association for Research in Vision and Ophthalmology
-		Recruited Chief Financial Officer with substantial venture capital and entrepreneurial experience
-		Loss from continuing operations reduced by $0.6 million, primarily due to cost reduction efforts

"Mimetogen is progressing from positive Phase II results into late stage clinical trials and we look forward to helping Garth and the team as they choose an optimal path to develop and commercialize MIM-D3," said Kevin Giese. "Our other primary investee, Spectral Diagnostics, continues to enroll its Phase III trial aimed at treating severe sepsis and septic shock. We are actively supporting Spectral's efforts and are excited about the value that this theranostic solution could bring to society as well as to Medwell shareholders."

Financial Results:

The consolidated net loss from continuing operations of the Corporation for the three months ended March 31, 2012 was $1.8 million compared with a consolidated net loss from continuing operations of $2.4 million for the same period in the previous year.

Loss and comprehensive loss for the three months ended March 31, 2012 was $1.9 million, or $0.02 per share compared to $2.8 million or $0.03 per share for the same period in the previous year. The results for the three months ended March 31, 2012 included the recognition of a loss from discontinued operation of $0.1 million compared to $0.4 million in the same period in the previous year. Revenue earned from services agreements for the three months ended March 31, 2012 was $0.4 million (2011 - $0.4 million). Included in contract services revenue is $0.4 million from the agreement with Spectral ($0.4 million 2011).Total consolidated expenses from continuing operations for the three months ended March 31, 2012 were $2.2 million compared with $2.9 million for the same period last year.

At March 31, 2012, cash and cash equivalents and short-term investments totaled $12.8 million compared with $14.4 million as of December 31, 2011. During the three months ended March 31, 2012 the cash outflows incurred in the operation of the Corporation were $0.5 million (2011 - $4.1 million) including $0.16 million in extraordinary costs associated with corporate reorganization and advisory services (net $0.34 million); and, cash outflows used in discontinued operations of $0.1 million (2011 - $0.3 million).The Corporation has sufficient working capital to meet its obligations as they come due.

Kevin Giese comments: "The loss for the quarter primarily reflects the market fluctuations in the value of our investments. Taking the long term view, our two major investments, Mimetogen and Spectral continue to progress towards value creating milestone events over the next few years. As to the cash burn, we are pleased to see that the $0.34 million net cash outflow from ongoing operations for the quarter is approaching our target rate, while recognizing that we continued to incur some small costs associated with the past reorganization efforts and review of new technologies."

As at March 31, 2012 there were 91,008,923 Class "A" 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.  Interim Condensed Consolidated Statements of Financial Position (Unaudited)
(expressed in thousands of Canadian dollars)
		March 31, 2012 $		December 31, 2011 $
Assets
Cash and cash equivalents		3,756		4,339
Investments		6,818		7,875
Restricted cash		2,210		2,210
Accounts receivable		348		334
Prepaid expenses		45		149
Property and equipment		19		23
		13,196		14,930
Liabilities
Accounts payable and accrued liabilities		350		424
Guarantees
Shareholders' Equity
Share capital		162,144		162,144
Contributed surplus		13,113		12,883
Deficit		(162,411)		(160,521)
		12,846		14,506
		13,196		14,930

Medwell Capital Corp.  Interim Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
(expressed in thousands of Canadian dollars)
		Three-month period ended March 31,
		2012 $		2011 $
Revenue
Contract services		375		439
Change in fair value of investments		1,057		1,149
Operating, general and administrative		893		1,468
Stock-based compensation		223		198
Depreciation of property and equipment		4		11
Loss on disposal of property and equipment		-		3
Foreign exchange loss		31		78
Interest earned		(13)		(56)
		2,195		2,851
Loss from continuing operations		(1,820)		(2,412)
Loss from discontinued operations		(70)		(410)
Loss and comprehensive loss		(1,890)		(2,822)
Basic and diluted loss per common share - continuing operations		(0.02)		(0.03)
Basic and diluted loss per common share - discontinued operations		-		-
Basic and diluted net loss per common share		(0.02)		(0.03)
Basic and diluted weighted average number of common shares outstanding		91,009		91,009

Medwell Capital Corp.  Interim Condensed Consolidated Statements of Cash Flows (Unaudited)
(expressed in thousands of Canadian dollars)
					Three-month period ended March 31,
					2012 $			2011 $
Cash provided by (used in)
Operating activities
Net loss from continuing operations					(1,820)			(2,412)
Purchase of investments					-			(2,861)
Proceeds from disposal of investments					-			152
Purchase of short-term investments					-			(151)
Items not involving cash
			Unrealized loss on investments		1,057			1,233
			Stock-based compensation		223			198
			Depreciation of property and equipment		4			11
			Loss on disposal of property and equipment		-			3
			Unrealized foreign exchange gain		-			77
					(536)			(3,750)
Net change in non-cash working capital items					16			(374)
					(520)			(4,124)
Foreign exchange loss on cash and cash equivalents held in foreign currency					-			(78)
Cash used in continuing operations					(520)			(4,202)
Cash used in discontinued operations					(63)			(345)
Decrease in cash and cash equivalents					(583)			(4,547)
Cash and cash equivalents - Beginning of period					4,339			24,841
Cash and cash equivalents - End of period					3,756			20,294
Cash and cash equivalents consists of
Bank accounts					2,003			1,706
Interest bearing deposits and securities					1,753			18,588
					3,756			20,294
	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]