Medwell Capital Reports 2012 Second Quarter Results

EDMONTON, Aug. 27, 2012 /CNW/ - Medwell Capital Corp. ("Medwell" or the "Company") (TSX-V: MWC) today announced financial and operational results for the second quarter ended June 30, 2012.

Second Quarter Highlights

• Received positive results for Mimetogen Pharmaceuticals' Phase II data for MIM-D3 for dry eye disease, presented in May at ARVO (Association for Research in Vision and Ophthalmology)
• Amended its service agreement with Spectral Diagnostics Inc., subsequent to quarter-end
• Announced its intention to complete a non-brokered private placement to raise up to $4,250,000, led by Birch Hill Equity Partners Management Inc., subsequent to quarter-end

"It's been a very busy year for our investments, with the advancements in Spectral's EUPHRATES Phase 3 study and Mimetogen's Phase 2 data announced at ARVO," said Kevin Giese, President and CEO of Medwell. "To continue driving value for shareholders, we now turn our attention to a private placement and partnership with Birch Hill.  They have a great track record as a private equity fund in Canada and we believe a partnership will lead to further value creating investment opportunities for Medwell and our stakeholders."

Financial Results
The consolidated net loss from continuing operations of the Corporation for the three months ended June 30, 2012, was $0.8 million or $0.01 per share compared with a consolidated net loss from continuing operations of $6.8 million or $0.07 per share for the same period in the previous year.  The results for the three months ended June 30, 2012, included $0.4 million in contract services revenue and the expenditures were reduced in comparison to the same period in the previous year, as the three months ended June 30, 2011 included $2.4 million in termination payments.

The consolidated net loss from continuing operations of the Corporation for the six months ended June 30, 2012 was $2.6 million or $0.03 per share compared with a consolidated net loss from continuing operations of $9.6 million or $0.11 per share for the same period in the previous year.  The results of the six months ended June 30, 2012 included the recognition of an unrealized loss of $1.2 million (2011 - $4.3 million) in the Corporation's investments and $0.8 million (2011 - $0.9 million) in contract services revenue. Expenditures decreased by $4.0 million in comparison to the same period in the previous year.

Revenue earned from services agreements totaled $0.4 million (2011 - $0.4 million) for the three months and $0.8 million (2011 - $ 0.9 million) for the six months ended June 30, 2012.  The contract services revenue is a result of the agreement with Spectral Diagnostics Inc.

Total consolidated expenses from continuing operations for the three months ended June 30, 2012, were $1.1 million as compared with $4.1 million in the three months ended June 30, 2011.  Total consolidated expenses from continuing operations for the six months ended June 30, 2012 were $ 2.2 million as compared with $6.3 million in the six months ended June 30, 2011.

Operating, general and administrative expenses decreased $3.0 million to $1.1 million for the three months ended June 30, 2012 (2011 - $4.1 million). Operating, general and administrative expenses decreased $3.9 million to $2.0 million for the six months ended June 30, 2012 (2011 - $5.9 million).

At June 30, 2012, cash and cash equivalents and restricted cash totaled $5.1 million as compared to $6.5 million at December 31, 2011.  At June 30, 2012, the Corporation had working capital of $3.5 million as compared to $3.9 million at December 31, 2011.  The $400,000 decrease in working capital is a direct result of cash used in operating activities.  The Corporation currently has sufficient working capital to meet its obligations as they come due.

At August 15, 2012, there were 91,008,923 Class "A" common shares of the Corporation issued and outstanding.

For complete financial results, please see our filings at www.sedar.com.

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)
		June 30, 2012		December 31, 2011
		$		$
Assets
Cash and cash equivalents		4,071		4,339
Investments		6,720		7,875
Restricted cash		1,017		2,210
Accounts receivable		406		334
Prepaid expenses		223		149
Property and equipment		16		23
		12,453		14,930
Liabilities
Accounts payable and accrued liabilities		572		424
Guarantees
Shareholders' Equity
Share capital		162,144		162,144
Contributed surplus		13,116		12,883
Deficit		(163,379)		(160,521)
		11,881		14,506
		12,453		14,930

Medwell Capital Corp.  Interim Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
(expressed in thousands of Canadian dollars)
		Six-month period ended June 30,					Three-month period ended June 30,
		2012 $		2011 $			2012 $		2011 $
Revenue
Contract services		750		882			375		420
Change in fair value of investments		1,167		4,302			110		3,069
Operating, general and administrative		1,999		5,885			1,106		4,106
Stock-based compensation		225		319			2		-
Depreciation of property and equipment		7		22			3		10
(Gain)Loss on sale of investments		-		(79)			-		5
Loss on disposal of property and equipment		-		3			-		-
Foreign exchange loss		31		104			-		26
Interest earned		(18)		(106)			(5)		(50)
		3,411		10,450			1,216		7,166
Loss from continuing operations		(2,661)		(9,568)			(841)		(6,746)
Loss from discontinued operations		(197)		-			(127)		-
Loss and comprehensive loss		(2,858)		(9,568)			(968)		(6,746)
Basic and diluted loss per common share -
	continuing operations	(0.03)		(0.11)			(0.01)		(0.07)
Basic and diluted loss per common share -
	discontinued operations	-		-			-		-
Basic and diluted net loss per common share		(0.03)		(0.11)			(0.01)		(0.07)
Basic and diluted weighted average number
	of common shares outstanding	91,009		91,009			91,009		91,009

Medwell Capital Corp.  Interim Condensed Consolidated Statements of Changes In Equity (Unaudited)
(expressed in thousands of Canadian dollars)
			Share capital $		Contributed surplus $		Deficit $		Total $
Balance, December 31, 2011			162,144		12,883		(160,521)		14,506
Net and comprehensive loss for
	the period		-		-		(2,858)		(2,858)
Employee share options:
	Value of services recognized		-		233		-		233
Balance, June 30, 2012			162,144		13,116		(163,379)		11,881
Balance, December 31, 2010			175,714		12,319		(148,664)		39,369
Net and comprehensive loss for
	the period		-		-		(9,568)		(9,568)
Employee share options:
	Value of services recognized		-		319		-		319
Balance, June 30, 2011			175,714		12,638		(158,232)		30,120

Medwell Capital Corp.  Interim Condensed Consolidated Statements of Cash Flows (Unaudited)
(expressed in thousands of Canadian dollars)
			Six-month period ended June 30,
			2012 $		2011 $
Cash provided by (used in)
Operating activities
Net loss from continuing operations			(2,661)		(9,568)
(Gain) Loss on sale of investments			-		(79)
Purchase of investments			(12)		(2,861)
Proceeds from sale of investments			-		152
Proceeds from (purchase of) short-term investments			-		385
Purchase of property and equipment			-		(8)
Transferred from restricted cash			1,193		-
Items not involving cash
	Unrealized loss on investments		1,167		4,302
	Stock-based compensation		225		319
	Depreciation of property and equipment		7		22
	Loss on disposal of property and equipment		-		3
	Unrealized foreign exchange gain		-		-
			(81)		(7,333)
Net change in non-cash working capital items			(121)		450
			(202)		(6,883)
Foreign exchange loss on cash and cash equivalents
	held in foreign currency		-		(100)
Cash used in continuing operations			(202)		(6,983)
Cash used in discontinued operations			(66)		(739)
(Decrease) Increase in cash and cash equivalents			(268)		(7,722)
Cash and cash equivalents - Beginning of period			4,339		24,959
Cash and cash equivalents - End of period			4,071		17,237
Cash and cash equivalents consists of
Bank accounts			928		1,357
Interest bearing deposits and securities			3,143		15,880
			4,071		17,237
Supplemental cash flow information
	Income taxes paid		$      -		$    -
	Interest paid		-		-

 

SOURCE: Medwell Capital Corp.

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


Michael Moore
Investor Relations
TMX Equicom
619-467-7067
[email protected]