MEDWELL CAPITAL REPORTS FIRST QUARTER 2011 RESULTS

EDMONTON, May 30, 2011 /CNW/ - Medwell Capital Corp. (TSXV: MWC) today announced financial and operational results for the three months ended March 31, 2011. In addition, the Company is in the process of undertaking organizational changes, including a further reduction in staff, to reduce expenditures and bring its net cash operating expenditures to under $1 million per year.

"These initiatives are being undertaken to bring costs in line with expected revenues, recognizing that the mid-stage healthcare sector has been slow to recover in Canada over the past year" said Mr. Kevin Giese, President and CEO of Medwell Capital.  "Medwell has now invested in several exciting technologies with the potential to increase asset value, and we expect to continue to work closely with these companies as they advance in development."

Quarter Highlights:

  • The Company committed to invest up to $2,000,000 in Mimetogen Pharmaceuticals Inc., a privately-held, clinical-stage Company developing a treatment for dry eye disease. Mimetogen completed patient recruitment in its phase II clinical trial of MIM-D3 for dry eye disease. A total of 150 patients have been enrolled in the trial with results expected in the second half of 2011.

  • Medwell and a consortium of buyers purchased in a private transaction 12,449,501 common shares and 962,500 common share purchase warrants of Spectral Diagnostics (TSX: SDI) from GrowthWorks Canadian Fund Ltd., representing 15.6% of the issued and outstanding shares.  As a result of the transaction, Medwell owns approximately 45% of Spectral's issued and outstanding common shares. In addition, Medwell owns 15,662,500 Warrants representing approximately 58% of the issued and outstanding Warrants of Spectral. Therefore on a partially diluted basis, assuming only Medwell exercises its warrants, it would own 51,812,001 common shares of Spectral, representing approximately 54% of the issued and outstanding common shares. On a fully diluted basis, Medwell owns approximately 46% of all issued and outstanding common shares, warrants and options of Spectral.

  • Announced that the service agreement under which Medwell provides clinical, regulatory and capital markets consulting services to Spectral Diagnostics (TSX: SDI) has been increased to $1.5 million per year, from $1.0 million, effective January 2011, in exchange for an increased level of service.

  • Medwell's wholly owned subsidiary Medwell Securities Inc. is currently acting for three biotech and pharmaceutical companies as financial or strategic advisor, giving the Company an additional potential for revenue generation in the forthcoming period.

Financial Results:

During the three months ended March 31, 2011 the Company used $1.5 million in its continuing operations.  At March 31, 2011, cash and cash equivalents and short-term investments totaled $23.1 million as compared to $27.5 million at December 31, 2010.  At March 31, 2011, the Corporation had working capital of $22.7 million as compared to $26.7 million at December 31, 2010.  The Corporation has sufficient working capital to meet its obligations as they come.

The Corporation recorded an unrealized loss of $1.2 million (2010 - Unrealized gain of $8.6 million) for the three months ended March 31, 2011.  The movement is due to changes in the estimated fair value of the Corporation's investments.  Revenue earned from the Corporation's services agreements with Spectral amounted to $0.4 million for the three months ended March 31, 2011 (2010 - $0.3 million).

Total consolidated expenses from continuing operations for the three months March 31, 2011 were $2.2 million as compared with $2.2 million in the three months ended March 31, 2010.

The consolidated net loss from continuing operations of the Corporation for the three months ended March 31, 2011 was $2.8 million or $0.03 per share compared with a consolidated net income from continuing operations of $6.7 million or $0.07 per share for the same period in the previous year.  The results for the three months ended March 31, 2011 included the recognition of an unrealized loss of $1.2 million on the Corporation's investments and $0.5 million of contract services revenue.  Expenditures remained constant for the three months ended March 31, 2011 compared to the same period in the previous year.

As at March 31, 2011 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 merchant bank that provides of capital and advisory services to the healthcare industry. 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.
(formerly BioMS Medical Corp.)
Consolidated Balance Sheet
As at December 31, 2010 and 2009

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(expressed in thousands of Canadian dollars)

    March 31,
2011
$
(Unaudited)
  December 31,
2010
$
         
Assets        
         
Current assets        
Cash and cash equivalents   22,623   24,959
Investments   14,061   12,507
Short-term investments   493   2,552
Accounts receivable   419   377
Prepaid expenses and other current assets   125   255
         
    37,721   40,650
         
         
Property and equipment   75   84
         
    37,796   40,734
         
Liabilities        
         
Current liabilities        
Accounts payable and accrued liabilities   201   516
Liabilities of discontinued operation   729   849
         
    930   1,365
         
         
         
Share capital   175,714   175,714
         
Contributed surplus   12,638   12,319
         
Accumulated deficit   (151,486)   (148,664)
         
    36,866   39,369
         
    37,796   40,734

Medwell Capital Corp.
(formerly BioMS Medical Corp.)
Consolidated Statements of Operations and Comprehensive Income (Loss)

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(expressed in thousands of Canadian dollars, except share and per share amounts)

    Three-month period ended
March 31,
         
    2011
$
  2010
$
Revenue        
Unrealized (loss) gain on investments   (1,233)   8,560
Realized gain on investments   84   -
Contract services    462   250
Interest   56   32
         
    (631)   8,842
         
Expenses        
Operating, general and administrative   1,779   1,547
Stock-based compensation (note 7)   319   432
Amortization of property and equipment   12   37
Loss on disposal of property and equipment   3   -
Foreign exchange loss   78   158
         
    2,191   2,174
         
Net (loss) income from continuing operations   (2,822)   6,668
Net (loss) income from discontinued operation   -   (383)
         
Net (loss) income and comprehensive (loss) income   (2,822)   6,285
         
Basic and diluted net (loss) income per common share - continuing operations         (0.03)         0.07
         
Basic and diluted net (loss) income per common share - discontinued operation                                      -          (0.01)
         
Basic and diluted net (loss) income per common share         (0.03)         0.07
         
Basic and diluted weighted average number of common shares outstanding   91,008,923   91,008,923
         

Medwell Capital Corp.
(formerly BioMS Medical Corp.)
Consolidated Statements of Cash Flows

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(expressed in thousands of Canadian dollars)

    Three-month period ended
March 31,
         
    2011
$
  2010
$
Cash provided by (used in)        
Operating activities        
Net (loss) income from continuing operations   (2,822)   6,668
Items not involving cash        
  Unrealized loss (gain) on investments   1,233   (8,560)
  Stock-based compensation   319   432
  Amortization of property and equipment   12   37
  Loss on disposal of property and equipment   3   -
    (1,255)   (1,423)
Net change in non-cash working capital items   (227)   (264)
    (1,482)   (1,687)
Investing activities        
Purchase of investments   (2,861)   (12,000)
Proceeds from disposal of investments   152   -
Net proceeds from (purchase of ) short-term investments   2,059   (3)
Purchase of property and equipment   (6)   (2)
    (656)   (12,005)
Foreign exchange (loss) gain on cash and cash equivalents held in foreign currency   (78)   180
         
Cash used in continuing operations   (2,216)   (13,512)
Cash used in discontinued operation   (120)   (3,252)
Decrease in cash and cash equivalents   (2,336)   (16,764)
Cash and cash equivalents - Beginning of period   24,959   48,774
         
Cash and cash equivalents - End of period   22,623   32,010
Cash and cash equivalents consists of        
Bank accounts   1,706   806
Interest bearing deposits and securities   20,917   31,204
    22,623   32,010

 

SOURCE Medwell Capital Corp.

For further information:

Tony Hesby     Ross Marshall
Ryan Giese     Investor Relations
Medwell Capital Corp.     416-815-0700 ext. 238
780-413-7152     416-815-0080 Fax
780-408-3040 Fax     E-mail: rmarshall@equicomgroup.com
E-mail: info@medwellcapital.com      
Internet: http://www.medwellcapital.com

 

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