Medwell Capital Reports Second Quarter 2011 Results

EDMONTON, Aug. 29, 2011 /CNW/ -- 
EDMONTON, Aug. 29, 2011 /CNW/ - Medwell Capital Corp. (TSXV: MWC) today
 announced financial and operational results for the three and six
 months ended June 30, 2011.


    --  Entered into an arrangement agreement to invest an additional
        $10 million in Spectral Diagnostics Inc. ("Spectral") and
        distribute approximately 54.3 million common shares of Spectral
        to Medwell shareholders (see description below)
    --  Mimetogen Pharmaceuticals Inc. ("Mimetogen"), a Medwell
        investment, announced positive top line efficacy and safety
        data from its Phase II clinical trial of MIM-D3 for dry eye
        disease



"The past quarter has seen the announcement of several important
 developments for Medwell, including a reorganization of the Company to
 reduce net cash burn, positive top line results from Mimetogen and the
 plan of arrangement with Spectral," said Mr. Kevin Giese, Chairman of
 the Board, President and CEO of Medwell Capital. "The net effect of all
 this, is that Medwell and its shareholders are being positioned to
 potentially realize significant value from these investments, should
 they continue to develop as expected. The plan of arrangement is also
 important in that it funds Spectral's clinical program, and allows
 Medwell shareholders to directly own shares in this exciting company
 with a fully-funded Phase 3 asset targeting an unmet medical need in a
 large market."


Arrangement Agreement:
Pursuant to the Arrangement, among other things Medwell will acquire a
 further 33,333,333 common shares ("Spectral Shares") of Spectral
 Diagnostics Inc. at a subscription price of $0.30 per share for
 aggregate proceeds of $10 million and will distribute approximately
 54,282,834 Spectral Shares to Shareholders, or, based on the number of
 issued Medwell Shares as of the date hereof, approximately 0.6 of a
 Spectral Share for each Medwell Share owned (the "Arrangement"). Each
 Shareholder will also be deemed to be the holder of one New Medwell
 Common Share for each Share held on the effective date of the
 Arrangement. After the completion of this transaction, Medwell will
 retain 15,200,000 common shares of Spectral, or approximately 13
 percent of the common shares outstanding (26 percent on a fully-diluted
 basis). Further information concerning the Arrangement can be found in
 Medwell's press releases of June 28, 2011, July 15, 2011 and August 26,
 2011.


With all required shareholder, court and other regulatory approvals now
 having been obtained, the Arrangement is now scheduled to close on
 September 9, 2011, which is also the record date for the Distribution.
 Medwell's voting Class "A" shares will commence trading on the TSX
 Venture Exchange on an ex-dividend basis at the opening of trading on
 September 7, 2011.  The completion of the Arrangement is subject to
 other customary closing conditions.


Financial Results:
The consolidated net loss from continuing operations of the Corporation
 for the three months ended June 30, 2011 was $6.7 million or $0.07 per
 share compared with a consolidated net loss from continuing operations
 of $9.0 million or $0.11 per share for the same period in the previous
 year.  The results for the three months ended June 30, 2011 included
 the recognition of an unrealized loss of $3.1 million on the
 Corporation's investments, $0.4 million in contract services revenue
 and $2.1 million for severance and termination payments.


The consolidated net loss from continuing operations of the Corporation
 for the six months ended June 30, 2011 was $9.6 million or $0.11 per
 share compared with a consolidated net loss from continuing operations
 of $2.4 million or $0.02 per share for the same period in the previous
 year.  The results for the three months ended June 30, 2011 included
 the recognition of an unrealized loss of $4.3 million on the
 Corporation's investments and $0.9 million in contract services
 revenue.


The Corporation recorded an unrealized loss of $3.1 million (2010 - $7.0
 million) for the three months and an unrealized loss of $4.3 million
 (2010 unrealized gain - $1.6 million) for the six months ended June 30,
 2011.


Revenue earned from services agreements for the three months ended June
 30, 2011 was $0.4 million (2010 - $0.3 million; Spectral $0.3 million
 2010) and $0.9 million (2010 - $0.5 million) for the six months ended
 June 30, 2011.  Included in contract services revenue is $0.7 million
 (2010 - $0.3 million) for the six months ended June 30, 2011 from the
 agreement with Spectral.


Total consolidated expenses from continuing operations for the three
 months ended June 30, 2011 were $4.1 million as compared with $1.6
 million for the same period last year. Total consolidated expenses from
 continuing operations for the six months ended June 30, 2011 were $6.3
 million as compared with $4.5 million for the same period last year.


At June 30, 2010, cash and cash equivalents and short-term investments
 totalled $19.4 million compared with $27.5 million as of December 31,
 2010. During the three months ended June 30, 2011 recorded net cash
 outflows for investments of $1.7 million (2010 - $0.5 million); cash
 outflows  incurred in the operation of the Corporation of $3.1 million
 (2010 - $1.6 million); and, cash outflows used in discontinued
 operations of $0.6 million (2010 - $1.0 million).  In the six months
 ended June 30, 2011 the Corporation had a decrease in cash and cash
 equivalents of $7.7 million compared to $19.7 million in the prior
 year.  The decrease in cash and cash equivalents in the six months
 ended June 30, 2010 is the net result of $2.3 million in investments,
 net operating activities incurred in the operation of the Corporation
 $4.7 million and amounts used in discontinued operations $0.7 million. 
 The Corporation has sufficient working capital to meet its obligations
 as they come due.


As at June 30, 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.
Consolidated Balance Sheets

                                                                     

(expressed in thousands of Canadian dollars)

                                         June 30, 2011   December 31,
                                                     $           2010
                                           (Unaudited)              $

                                                                     

Assets                                                               

                                                                     

Current assets                                                       

Cash and cash equivalents                       17,237         24,959

Investments                                     10,992         12,507

Short-term investments                           2,167          2,552

Accounts receivable                                316            377

Prepaid expenses and other current                      
assets                                             390            255

                                                                     

                                                31,102         40,650

                                                                     

                                                                     

Property and equipment                              67             84

                                                                     

                                                31,169         40,734

                                                                     

Liabilities                                                          

                                                                     

Current liabilities                                                  

Accounts payable and accrued                            
liabilities                                        939            516

Liabilities of discontinued operation              110            849

                                                                     

                                                 1,049          1,365

                                                                     

                                                                     

                                                                     

Share capital                                  175,714        175,714

                                                                     

Contributed surplus                             12,638         12,319

                                                                     

Accumulated deficit                          (158,232)      (148,664)

                                                                     

                                                30,120         39,369

                                                                     

                                                31,169         40,734









                                                                     

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

                                                                      

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

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

                                                                     

                    2011           2010           2011           2010
                       $              $              $              $

                                                                     

Revenue                                                 
Unrealized
gain (loss) on
investments      (4,302)          1,580        (3,069)        (6,980)

Realized gain                                           
(loss) on
investments           79              -            (5)              -

Contract                                                
services             882            500            420            250

Interest             106             85             50             53

                                                                     

                 (3,235)          2,165        (2,604)        (6,677)

                                                                     

Expenses                                                             

Operating,                                              
general and
administrative     5,885          3,135          4,106          1,594

Stock-based                                             
compensation         319          1,382              -            950

Amortization                                            
of property
and equipment         22             75             10             37

Loss on                                                 
disposal of
property and
equipment              3              -              -              -

Foreign                                                 
exchange
(gain) loss          104           (73)             26          (238)

                                                                     

                   6,333          4,519          4,142          2,343

                                                                     

Net loss from                                           
continuing
operations       (9,568)        (2,354)        (6,746)        (9,020)

Net (loss)                                              
income from
discontinued
operation              -          (239)              -            144

Net loss and                                            
comprehensive
loss             (9,568)        (2,593)        (6,746)        (8,876)

                                                                     

Basic and                                               
diluted net
loss per
common share -
continuing              
operations        (0.11)         (0.02)         (0.07)         (0.11)

Basic and                                               
diluted net
(loss) income
per common
share -
discontinued
operation              -         (0.01)              -           0.01

Basic and                                               
diluted net
loss per                
common share      (0.11)         (0.03)         (0.07)         (0.10)

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         91,009         91,009         91,009









Medwell Capital Corp.                                  
Consolidated Statements of Cash Flows

(expressed in thousands of Canadian dollars)

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

                                                              

                     2011            2010      2011       2010
                        $               $         $          $

Cash provided                                        
by (used in)                                                  

Operating                                            
activities                                                    

Net (loss)                                           
income from
continuing
operations        (9,568)         (2,354)   (6,746)    (9,020)

Items not                                            
involving cash                                                

  Unrealized                                         
  loss (gain)
  on
  investments       4,302         (1,580)     3,069      6,980

  Realized                                           
  (gain) loss
  on
  investments        (79)               -         5          -

  Stock-based                                        
  compensation        319           1,382         -        950

  Amortization                                       
  of property
  and equipment        22              75        10         37

  Loss on                                            
  disposal of
  property and
  equipment             3               -         -          -

                  (5,001)         (2,477)   (3,662)    (1,053)

Net change in                                        
non-cash
working capital
items                 450           (871)       593      (433)

                  (4,551)         (3,348)   (3,069)   (1,486) 

Investing                                            
activities                                                    

Purchase of                                          
investments       (2,861)        (12,504)         -      (504)

Proceeds from                                        
disposal of
investments           152               -         -          -

Net proceeds                                         
from (purchase
of) short-term
investments           385             (6)   (1,674)        (3)

Purchase of                                          
property and
equipment             (8)             (6)       (2)        (4)

                  (2,332)        (12,516)   (1,676)      (511)

Foreign                                              
exchange (loss)
gain on cash
and cash
equivalents
held in foreign
currency            (100)             250      (22)         70

                                                              

Cash used in                                         
continuing
operations        (6,983)        (15,614)   (4,767)    (1,927)

Cash used in                                         
discontinued
operation           (739)         (4,106)     (619)    (1,029)

Decrease in                                          
cash and cash
equivalents       (7,722)        (19,720)   (5,386)    (2,956)

Cash and cash                                        
equivalents -
Beginning of
period             24,959          48,774    22,623     32,010

                                                              

Cash and cash                                        
equivalents -
End of period      17,237          29,054    17,237     29,054

Cash and cash                                        
equivalents
consists of                                                   

Bank accounts       1,357           1,256     1,357      1,256

Interest                                             
bearing
deposits and
securities         15,880          27,798    15,880     27,798

                   17,237          29,054    17,237     29,054





 


 


 


To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/August2011/29/c7057.html



table border="0" valign="top" tr valign="top" td align="left" Tony Hesby /td td valign="top" align="left" Ross Marshall /td /tr tr valign="top" td align="left" Ryan Giese /td td valign="top" align="left" Investor Relations /td /tr tr valign="top" td align="left" bMedwell Capital Corp./b /td td valign="top" align="left" 416-815-0700 ext. 238 /td /tr tr valign="top" td align="left" 780-413-7152 /td td valign="top" align="left" 416-815-0080 Fax /td /tr tr valign="top" td align="left" 780-408-3040 Fax /td td valign="top" align="left" E-mail: a href="mailto:[e-mail]"[e-mail]/a /td /tr tr valign="top" td align="left" E-mail: a href="mailto:[e-mail]"[e-mail]/a /td td valign="top" align="left"   /td /tr tr valign="top" td align="left" Internet: a href="http://www.medwellcapital.com"http://www.medwellcapital.com/a /td td valign="top" align="left"   /td /tr /table p   /p 

Copyright