MEDWELL CAPITAL REPORTS FIRST QUARTER 2011 RESULTS
Edmonton, Alberta, May 30, 2011 – Medwell Capital Corp. (TSX-V: 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.”
- 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.
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
This press release may contain forward-looking statements, which reflect the Corporation’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.
VP Corporate Communications