Second Quarter Revenue Totals $7.5 Million
Total Enrollment Exceeds 85% for Burn Center Pivotal U.S. Clinical Trial
Q2 2024 Overview
DALLAS, Aug. 12, 2024 (GLOBE NEWSWIRE) -- Spectral AI, Inc. (Nasdaq: MDAI) (“Spectral AI” or the “Company”), an artificial intelligence (AI) company focused on medical diagnostics for faster and more accurate treatment decisions in wound care, today announced financial results for the second quarter ended June 30, 2024 (“Q2 2024”) and provided an update on its ongoing business activities.
“This is one of the most exciting and consequential periods in our history, and I am proud to see the teams advancing our proprietary, AI-driven DeepView™ System for burn indication (“DeepView AI- Burn”) along multiple fronts, including clinical, developmental and commercial,” said Peter M. Carlson, CEO of Spectral AI. “The upcoming completion of enrollment at burn centers for our U.S. Burn Pivotal Study, continued development of both our cart-based device and the handheld diagnostic tool, and anticipation of our first commercial revenues in the U.K. later this year validate our vison and reinforce our strategic imperatives.”
CLINCIAL TRIAL UPDATES
SELECT BUSINESS HIGHLIGHTS
Product Deployment and Market Development
Corporate
Q2 2024 FINANCIAL RESULTS OVERVIEW
All comparisons are to the second quarter ended June 30, 2023 (“Q2 2023”) unless otherwise stated.
Research & Development Revenue 1
Research & Development Revenue for Q2 2024 rose 76% to $7.5 million from $4.3 million, primarily reflecting an increased level of activity under the Company’s Project BioShield (PBS) contract with BARDA for the advanced development of the DeepView™ System.
Gross Margin
Gross margin for Q2 2024 improved to 44.3% from 42.1%, due to a higher reimbursement rate under the BARDA PBS Contract as compared to the rate associated with the now completed BARDA Burn II contract.
General & Administrative Expense
General & administrative expenses in Q2 2024 rose to $5.8 million, or 77% of revenues, from $4.8 million, or 112% of revenues.
Operating Loss
Operating loss narrowed to $(2.4) million from $(3.0) million.
Net Loss
Net loss for Q2 2024 narrowed to $(2.9) million, or $(0.16) per share, as compared to a net loss of $(3.1) million, or $(0.23) per share.
Financial Condition
As of June 30, 2024, cash was $6.9 million as compared to $4.8 million at December 31, 2023. Cash at June 30, 2024 included $0.9 million in cash in the Company’s newly formed wholly-owned subsidiary Spectral IP, Inc.
2024 Guidance
The Company reiterates its revenue guidance of approximately $28.0 million for FY 2024. Financial guidance for FY 2024 does not reflect contributions from the sale of the DeepView™ System for burn in the U.K. that is expected to begin in Q4 2024 or any additional material financial contributions that may result from the commercialization of our DeepView™ System.
1Research and Development Revenue consisted primarily of funding from the Biomedical Advanced Research and Development Authority (BARDA), part of the Administration for Strategic Preparedness and Response (ASPR) within the U.S. Department of Health and Human Services.
CONFERENCE CALL
The Company will host a conference call today at 5:00 pm Eastern Time to discuss these results.
Investors interested in participating in the live call can dial:
A simultaneous webcast of the call may be accessed online from the Events & Presentations section of the Investor Relations page of the Company’s website at https://investors.spectral-ai.com/news-events/events.
About Spectral AI
Spectral AI, Inc. is a Dallas-based predictive AI company focused on medical diagnostics for faster and more accurate treatment decisions in wound care, with initial applications involving patients with burns and diabetic foot ulcers. The Company is working to revolutionize the management of wound care by “Seeing the Unknown®” with its DeepView™ System. The DeepView™ System is a predictive device that offers clinicians an objective and immediate assessment of a wound’s healing potential prior to treatment or other medical intervention. With algorithm-driven results and a goal to change the current standard of care, the DeepView™ System is expected to provide faster and more accurate treatment insight towards value care by improving patient outcomes and reducing healthcare costs. For more information about the DeepView™ System, visit www.spectral-ai.com.
Forward Looking Statements
Certain statements made in this release are “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995, including statements regarding the Company’s strategy, plans, objectives, initiatives and financial outlook. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements.
These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside Company’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. As such, readers are cautioned not to place undue reliance on any forward-looking statements.
Investors should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” sections of the Company’s filings with the SEC, including the Registration Statement and the other documents filed by the Company. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements.
Investors:
The Equity Group
Devin Sullivan
Managing Director
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Conor Rodriguez
Analyst
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| Spectral AI, Inc. Unaudited Condensed Consolidated Balance Sheets (in thousands, except share and per share data) | ||||||||
| June 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 6,877 | $ | 4,790 | ||||
| Accounts receivable, net | 2,295 | 2,346 | ||||||
| Inventory | 267 | 230 | ||||||
| Deferred offering costs | - | 283 | ||||||
| Prepaid expenses | 1,249 | 1,452 | ||||||
| Other current assets | 973 | 801 | ||||||
| Total current assets | 11,661 | 9,902 | ||||||
| Non-current assets: | ||||||||
| Property and equipment, net | 7 | 12 | ||||||
| Right-of-use assets | 2,229 | 778 | ||||||
| Total Assets | $ | 13,897 | $ | 10,692 | ||||
| Commitments and contingencies (Note 8) | ||||||||
| Liabilities and Stockholders’ Deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,403 | $ | 2,683 | ||||
| Accrued expenses | 2,733 | 4,300 | ||||||
| Deferred revenue | 1,315 | 2,311 | ||||||
| Lease liabilities, short-term | 224 | 853 | ||||||
| Notes payable | - | 436 | ||||||
| Notes payable - at fair value | 7,001 | - | ||||||
| Notes payable - related party | 1,000 | - | ||||||
| Warrant liabilities | 1,450 | 1,818 | ||||||
| Total current liabilities | 16,126 | 12,401 | ||||||
| Lease liabilities, long-term | 2,036 | - | ||||||
| Total Liabilities | 18,162 | 12,401 | ||||||
| Stockholders’ Deficit | ||||||||
| Preferred stock ($0.0001 par value); 1,000,000 shares authorized; no shares issued and outstanding as of June 30, 2024 and December 31, 2023 | - | - | ||||||
| Common stock ($0.0001 par value); 80,000,000 shares authorized; 17,606,367 and 16,294,935 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | 2 | 2 | ||||||
| Additional paid-in capital | 34,580 | 31,065 | ||||||
| Accumulated other comprehensive income | 10 | 12 | ||||||
| Accumulated deficit | (38,857 | ) | (32,788 | ) | ||||
| Total Stockholders’ Deficit | (4,265 | ) | (1,709 | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | 13,897 | $ | 10,692 | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements
| Spectral AI, Inc. Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except share and per share data) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Research and development revenue | $ | 7,478 | $ | 4,251 | $ | 13,804 | $ | 9,329 | ||||||||
| Cost of revenue | (4,164 | ) | (2,460 | ) | (7,545 | ) | (5,357 | ) | ||||||||
| Gross profit | 3,314 | 1,791 | 6,259 | 3,972 | ||||||||||||
| Operating costs and expenses: | ||||||||||||||||
| General and administrative | 5,756 | 4,782 | 10,844 | 9,861 | ||||||||||||
| Total operating costs and expenses | 5,756 | 4,782 | 10,844 | 9,861 | ||||||||||||
| Operating loss | (2,442 | ) | (2,991 | ) | (4,585 | ) | (5,889 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Net interest (expense) income | (6 | ) | 42 | 8 | 86 | |||||||||||
| Borrowing related costs | (699 | ) | - | (975 | ) | - | ||||||||||
| Change in fair value of warrant liability | 348 | (81 | ) | 368 | (65 | ) | ||||||||||
| Change in fair value of notes payable | (167 | ) | - | (101 | ) | - | ||||||||||
| Foreign exchange transaction (loss) gain, net | (9 | ) | - | (25 | ) | 13 | ||||||||||
| Other income (expenses), including transactions costs | 180 | - | (668 | ) | (738 | ) | ||||||||||
| Total other expense, net | (353 | ) | (39 | ) | (1,393 | ) | (704 | ) | ||||||||
| Loss before income taxes | (2,795 | ) | (3,030 | ) | (5,978 | ) | (6,593 | ) | ||||||||
| Income tax provision | (69 | ) | (40 | ) | (91 | ) | (86 | ) | ||||||||
| Net loss | $ | (2,864 | ) | $ | (3,070 | ) | $ | (6,069 | ) | $ | (6,679 | ) | ||||
| Net loss per share of common stock | ||||||||||||||||
| Basic and Diluted | $ | (0.16 | ) | $ | (0.23 | ) | $ | (0.36 | ) | $ | (0.51 | ) | ||||
| Weighted average common shares outstanding | ||||||||||||||||
| Basic and Diluted | 17,598,357 | 13,210,320 | 17,079,328 | 13,200,515 | ||||||||||||
| Other comprehensive income (loss): | ||||||||||||||||
| Foreign currency translation adjustments | $ | - | $ | 2 | $ | (2 | ) | $ | 3 | |||||||
| Total comprehensive loss | $ | (2,864 | ) | $ | (3,068 | ) | $ | (6,071 | ) | $ | (6,676 | ) | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements
| Spectral AI, Inc. Unaudited Condensed Consolidated Statements of Cash Flows (in thousands, except share and per share data) | ||||||||
| Six Months Ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (6,069 | ) | $ | (6,679 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation expense | 5 | 5 | ||||||
| Stock-based compensation | 685 | 696 | ||||||
| Amortization of right-of-use assets | 320 | 350 | ||||||
| Change in fair value of warrant liabilities | (368 | ) | 65 | |||||
| Change in fair value of notes payable | 101 | - | ||||||
| Costs from issuance of common stock | 372 | - | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 51 | 774 | ||||||
| Inventory | (37 | ) | - | |||||
| Unbilled revenue | - | 527 | ||||||
| Prepaid expenses | 203 | (11 | ) | |||||
| Other assets | (172 | ) | (322 | ) | ||||
| Accounts payable | (206 | ) | (752 | ) | ||||
| Accrued expenses | (1,567 | ) | (405 | ) | ||||
| Deferred revenue | (996 | ) | 509 | |||||
| Lease liabilities | (364 | ) | (284 | ) | ||||
| Net cash used in operating activities | (8,042 | ) | (5,527 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of common stock | 2,667 | - | ||||||
| Proceeds from notes payable | 9,200 | - | ||||||
| Proceeds from notes payable - related party | 1,000 | - | ||||||
| Payments of deferred offering costs | - | (306 | ) | |||||
| Payments for notes payable | (2,736 | ) | (175 | ) | ||||
| Stock option exercises | - | - | ||||||
| Net cash provided by (used in) financing activities | 10,131 | (481 | ) | |||||
| Effect of exchange rate changes on cash | (2 | ) | - | |||||
| Net increase (decrease) in cash | 2,087 | (6,008 | ) | |||||
| Cash, beginning of period | 4,790 | 14,174 | ||||||
| Cash, end of period | $ | 6,877 | $ | 8,166 | ||||
| Supplemental cash flow information: | ||||||||
| Cash paid for interest | $ | - | $ | (3 | ) | |||
| Cash paid for taxes | $ | - | $ | - | ||||
| Noncash operating and financing activities disclosure: | ||||||||
| Recognition of Right-of-use assets and related lease liabilities upon lease amendment | $ | 1,771 | $ | 483 | ||||
| Unpaid deferred offering costs | $ | - | $ | 818 | ||||
| Broker receivable for stock option exercises | $ | - | $ | 6 | ||||
| Last Trade: | US$1.88 |
| Daily Change: | 0.10 5.56 |
| Daily Volume: | 1,552,592 |
| Market Cap: | US$36.660M |
December 12, 2024 December 09, 2024 December 02, 2024 November 21, 2024 November 19, 2024 | |
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