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Press release from CNW Group

Medwell Capital Reports 2012 Second Quarter Results

Monday, August 27, 2012

Medwell Capital Reports 2012 Second Quarter Results17:00 EDT Monday, August 27, 2012EDMONTON, 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 HighlightsReceived 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-endAnnounced 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 ResultsThe 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 4,339Investments 6,720 7,875Restricted cash 1,017 2,210Accounts receivable 406 334Prepaid expenses 223 149Property 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 services750 882  375 420                  Change in fair value of investments1,167 4,302  110 3,069Operating, general and administrative1,999 5,885  1,106 4,106Stock-based compensation225 319  2 -Depreciation of property and equipment7 22  3 10(Gain)Loss on sale of investments- (79)  - 5Loss on disposal of property and equipment- 3  - -Foreign exchange loss31 104  - 26Interestearned(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)   Sharecapital$ Contributedsurplus$ Deficit$ Total$Balance, December 31, 2011 162,144 12,883 (160,521) 14,506         Net and comprehensive loss for         the period - - (2,858) (2,858)Employee share options:         Value of services recognized - 233 - 233         Balance, June 30, 2012 162,144 13,116 (163,379) 11,881                  Balance, December 31, 2010 175,714 12,319 (148,664) 39,369         Net and comprehensive loss for         the period - - (9,568) (9,568)Employee share options:         Value of services recognized - 319 - 319         Balance, June 30, 2011 175,714 12,638 (158,232) 30,120 Medwell Capital Corp. Interim Condensed Consolidated Statements of Cash Flows(Unaudited) (expressed in thousands of Canadian dollars)   Six-month period ended June30,          2012$ 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 - 152Proceeds from (purchase of) short-term investments - 385Purchase 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 17,237Cash and cash equivalents consists of      Bank accounts 928 1,357Interest bearing deposits and securities 3,143 15,880  4,071 17,237Supplemental cash flow information     Income taxes paid   $      - $    - Interest paid         - -      SOURCE: Medwell Capital Corp.For further information: Tony Hesby Medwell Capital Corp. 780-413-7152 780-408-3040 Fax info@medwellcapital.com  http://www.medwellcapital.com  Michael Moore Investor Relations TMX Equicom 619-467-7067 mmoore@equicomgroup.com