Medwell Capital Announces Second Quarter 2010 Results

Toronto Stock Exchange Symbol: MWC

EDMONTON, Aug. 12 /CNW/ - Medwell Capital Corp. (TSX: MWC), today announced financial and operational results for the three and six months ended June 30, 2010.

Highlights for the quarter:

    
    -   Medwell Capital Corp. announced its new name and its strategy to
        become a leading service provider to the healthcare industry. Medwell
        Capital will directly invest in and advise companies on strategy,
        financing, mergers & acquisitions (M&A), licensing transactions and
        undertake technology development. Medwell Capital trades on the
        Toronto Stock Exchange under the symbol "MWC".
    -   Appointed Mr. Nitin Kaushal, a leading healthcare investment banker,
        to implement the Company's new strategy. Mr. Kaushal brings more than
        25 years of financial and investment experience to Medwell Capital
        and will serve as its Executive Vice President and Managing Director.
    

Novation Pharmaceuticals Inc.

Medwell Capital also announced that on June 11, 2010 it purchased a convertible debenture in Novation Pharmaceuticals Inc. ("Novation"), a private company, in the amount of $250,000. The debenture matures on June 10, 2012 and carries a 6% interest rate. Novation focuses on discovering and developing small-molecule therapeutics that modulate messenger RNA ("mRNA") to treat a broad range of diseases. Novation scientists discovered that it is possible to modulate the stability of mRNA with orally available small molecules, an observation that led directly to the development of their proprietary drug discovery technology, called Quest.

Financial Results:

Medwell Capital is reporting results from both continuing and discontinued operations. Continuing operations consist of activities related Medwell Capital as an investment and advisory service provider to the healthcare industry. Medwell Capital's discontinued operations relate to the late stage clinical development program for dirucotide, a drug for the treatment of multiple sclerosis.

The consolidated net loss from continuing operations of the Corporation for the three months ended June 30, 2010 was $9.5 million or $0.10 per share compared with a consolidated net loss from continuing operations of $2.5 million or $0.03 per share for the same period in the previous year. The consolidated net loss from continuing operations of the Corporation for the six months ended June 30, 2010 was $3.0 million or $0.03 per share compared with a consolidated net loss from continuing operations of $6.2 million or $0.07 per share for the same period in the previous year.

Revenue earned from the services agreement initiated with Spectral during the quarter amounted to $0.25 million for the three months ended June 30, 2010. Interest income earned on funds invested was $0.1 million for the three months ended June 30, 2010, compared to $0.1 million for the same period in the previous year. Revenue earned from the services agreement with Spectral amounted to $0.5 million for the first six months of June 30, 2010. Interest income earned on funds invested was $0.1 million for the first six months of June 30, 2010, compared to $0.3 million for the same period in the previous year, due to the decrease in cash and cash equivalents and levels of current prevailing interest rates.

Total consolidated expenses from continuing operations for the three months ended June 30, 2010 were $2.8 million as compared with $2.6 million in the three months ended June 30, 2009. Total consolidated expenses from continuing operations for the six months ended June 30, 2010 were $5.2 million as compared with $6.5 million in the six months ended June 30, 2009.

The consolidated net income from discontinued operations for the three months ended June 30, 2010 was $0.6 million or $0.01 per share compared with a consolidated net income from discontinued operations of $4.0 million or $0.04 per share for the same period in the previous year. Consolidated net loss from discontinued operations for the first six months of 2010 was $0.4 million or $0.01 per share compared with a consolidated net income from discontinued operations of $6.3 million or $0.07 per share for the same period in the previous year. Upon the conclusion of the MAESTRO-01 clinical trial the Company discontinued the other dirucotide clinical trials, MAESTRO-02 and MAESTRO-03, and completed final collection of data and records.

At June 30, 2010, cash and cash equivalents and short-term investments totaled $31.8 million as compared to $51.4 million at December 31, 2009. At June 30, 2010, the Company had working capital of $32.3 million as compared to $47.5 million at December 31, 2009. Management estimates that the current working capital is sufficient for the Company to meet its obligations.

As at June 30, 2010 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 service provider in the healthcare industry. For further information please visit www.medwellcapital.com.

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.
    (formerly BioMS Medical Corp.)
    Interim Consolidated Balance Sheet
    (Unaudited)
    -------------------------------------------------------------------------

                                                       June 30,  December 31,
                                                          2010          2009
                                                             $             $
                                                    (Unaudited)

    Assets

    Current assets
    Cash and cash equivalents                           29,054        48,774
    Short-term investments                               2,668         2,662
    Accounts receivable                                    190             -
    Goods and services tax recoverable                      48            37
    Other prepaid expenses                                 300            79
    Investments                                         14,084             -
    Assets of discontinued operation                       400           771
                                                  -------------  ------------
                                                        46,744        52,323

    Property and equipment                                 281           350
                                                  -------------  ------------

                                                        47,025        52,673
                                                  -------------  ------------
                                                  -------------  ------------

    Liabilities

    Current liabilities
    Accounts payable and accrued liabilities               159           358
    Liabilities of discontinued operation                  226         4,464
                                                  -------------  ------------

                                                           385         4,822
                                                  -------------  ------------

    Share capital                                      175,714       175,714

    Contributed surplus                                 12,319        10,937

    Accumulated deficit                               (141,393)     (138,800)
                                                  -------------  ------------

                                                        46,640        47,851
                                                  -------------  ------------

                                                        47,025        52,673
                                                  -------------  ------------
                                                  -------------  ------------



    Medwell Capital Corp.
    (formerly BioMS Medical Corp.)
    Interim Consolidated Statement of Operations and Comprehensive Income
    (Loss)
    (Unaudited)
    -------------------------------------------------------------------------

                                      Six-month period    Three-month period
                                         ended June 30,        ended June 30,

                                       2010       2009       2010       2009
                                          $          $          $          $
                                  --------------------- ---------------------

    Revenue
    Unrealized gain (loss) on
     investments                      1,580          -     (6,980)         -
    Contract services                   500          -        250          -
    Interest                             85        266         53         96
                                  --------------------- ---------------------

                                      2,165        266     (6,677)        96
                                  --------------------- ---------------------

    Expenses
    Operating, general and
     administrative                   3,782      4,313      2,081      2,239
    Stock-based compensation          1,382      1,845        950          -
    Amortization of property
     and equipment                       75         85         37         42
    Foreign exchange (gain) loss        (73)       267       (238)       281
                                  --------------------- ---------------------

                                      5,166      6,510      2,834      2,562
                                  --------------------- ---------------------

    Net (loss) from continuing
     operations                      (3,001)    (6,244)    (9,507)    (2,466)
    Net income from discontinued
     operation                          408      6,349        631      3,970
    Net (loss) income and
     comprehensive (loss) income     (2,593)       105     (8,876)     1,504
                                  --------------------- ---------------------
                                  --------------------- ---------------------

    Basic and diluted net loss
     per common share -
     continuing operations            (0.03)     (0.07)     (0.10)     (0.03)

    Basic and diluted net
     income per common share -
     discontinued operation            0.01       0.07       0.01       0.04

    Basic and diluted net (loss)
     income per common share          (0.03)      0.01      (0.10)      0.02

    Basic weighted average number
     of common shares outstanding    91,009     91,009     91,009     91,009

    Diluted weighted average
     number of common shares
     outstanding                     91,009     91,563     91,009     91,356



    Medwell Capital Corp.
    (formerly BioMS Medical Corp.)
    Interim Consolidated Statement of Cash Flows
    (Unaudited)
    -------------------------------------------------------------------------

                                      Six-month period    Three-month period
                                         ended June 30,        ended June 30,

                                       2010       2009       2010       2009
                                          $          $          $          $
                                  --------------------- ---------------------

    Cash provided by (used in)
    Operating activities
    Net income (loss)                (2,593)       105     (8,876)     1,504
    Items not involving cash
      Unrealized (gain) loss
       on investments                (1,580)         -      6,980          -
      Stock-based compensation        1,382      1,845        950          -
      Amortization of property
       and equipment                     75         85         37         42
                                  --------------------- ---------------------
                                     (2,716)     2,035       (909)     1,546
    Net change in non-cash
     working capital items             (871)    (1,713)      (433)    (1,495)
                                  --------------------- ---------------------
                                     (3,587)       322     (1,342)        51
                                  --------------------- ---------------------
    Investing activities
    Purchase of investments         (12,504)         -       (504)         -
    Net purchase of short-term
     investments                         (6)       (38)        (3)       (19)
    Purchase of property and
     equipment                           (6)        (7)        (4)        (6)
                                  --------------------- ---------------------
                                    (12,516)       (45)      (511)       (25)
                                  --------------------- ---------------------
    Foreign exchange gain on
     cash and cash equivalents
     held in foreign currency           250      1,550         70      1,381
                                  --------------------- ---------------------

    Cash (used in) provided by
     continuing operations          (15,853)     1,827     (1,783)     1,407

    Cash used in discontinued
     operation                       (3,867)   (24,789)    (1,173)   (12,272)
                                  --------------------- ---------------------
    Decrease in cash and cash
     equivalents                    (19,720)   (22,962)    (2,956)   (10,865)
                                  --------------------- ---------------------
    Cash and cash equivalents
     - Beginning of period           48,774     87,826     32,010     75,729
                                  --------------------- ---------------------
    Cash and cash equivalents
     - End of period                 29,118     64,864     29,054     64,864
                                  --------------------- ---------------------
                                  --------------------- ---------------------
    Cash and cash equivalents
     consists of
    Bank accounts                     1,256      1,282      1,256      1,282
    Interest bearing deposits
     and securities                  27,798     63,582     27,798     63,582
                                  --------------------- ---------------------
                                     29,054     64,864     29,054     64,864
                                  --------------------- ---------------------
                                  --------------------- ---------------------
    

SOURCE Medwell Capital Corp.

For further information: For further information: Tony Hesby, Ryan Giese, Medwell Capital Corp., 780-413-7152, 780-408-3040 Fax, E-mail: info@medwellcapital.com; James Smith, Investor Relations, 416-815-0700 ext. 229, 416-815-0080 Fax, E-mail: jsmith@equicomgroup.com

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Medwell Capital Corp.

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