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Spectral Medical Announces Third Quarter Results and Provides Corporate Update

November 09, 2023 | Last Trade: C$0.59 0.00 0.00
  • Tigris Trial Enrollment Reaches 76 Patients
  • Crude mortality results continue to exceed expectations

TORONTO, Nov. 09, 2023 (GLOBE NEWSWIRE) -- Spectral Medical Inc. (“Spectral” or the “Company”) (TSX: EDT), a late-stage theranostic company advancing therapeutic options for sepsis and septic shock, today announced its financial results for the third quarter ended September 30, 2023 and provided a corporate update.

During the third quarter, the Company continued to experience momentum in Tigris Trial enrollment. Management is pleased to report positive progress on these initiatives to increase Tigris Trial enrollment, specifically:

  • During and subsequent to the third quarter the Company enrolled an additional eleven patients, of which nine or approximately 80% came from new sites opened for enrollment in 2023;
  • 76 patients enrolled to date and the Company continues to close in on its interim target of 90 patients, an important milestone as Spectral’s strategic commercial partner, Baxter (BAX:NYSE), will have the opportunity to view the data as well as provide a second milestone payment to Spectral;
  • Addition of two new trial sites, the Mayo Clinic and Emory Healthcare, subsequent to the third quarter bringing current total trial sites to 20;
  • During the third quarter, full transition from the incumbent CRO, Beaufort was completed;
  • Spectral Medical was featured in an episode of the ‘The Balancing Act’ airing on Lifetime TV (Advancing Therapeutic Options for Sepsis and Endotoxic Septic Shock - The Balancing Act) focused on advancing therapeutic options for sepsis and endotoxic septic shock, which was aired during the quarter; and
  • On September 7, 2023, Spectral completed a private placement of convertible notes for gross proceeds of USD$4,553,000 led by the Company’s strategic investors Baxter and Pinnacle Island LP.

Dr. John Kellum, Chief Medical Officer of Spectral Medical, stated, “We continue to experience patient enrollment momentum supported by new sites we have onboarded during 2023. We continue to make progress opening additional sites, which should positively impact the pace of enrollment. Overall, we are rapidly advancing our Tigris trial and remain highly encouraged by the outlook, given the fact preliminary mortality data continues to exceed our expectations.”

“We are taking measured, yet rapid action to maintain and even increase momentum in patient enrollment with a view to enrolling our interim count of 90 patients, which is expected to play as a major catalyst for the Company,” said Chris Seto, Chief Executive Officer of Spectral Medical. “Based on the pace of patient enrollment in the past number of months, and our activities around site additions, we continue to drive towards the 90 patient interim milestone.”

Financial Review

Revenue for three months ended September 30, 2023, was $397,000 compared to $362,000 for the same period last year, representing an increase of $35,000, or 9.7%. Revenue for six months ended September 30, 2023, was $1,233,000 and $1,114,000 for the same period last year, representing an increase of $119,000, or 10.7%. This increase was mainly due to an increase in proprietary biochemicals product revenue.

Operating expenses for the three months ended September 30, 2023, were $3,658,000, compared to $2,705,000 for the same period in the prior year, an increase of $953, or 35.2%. The change is primarily due to an increase in consulting and professional fees by $265,000 primarily due to increased site and patient fees related to the Tigris trial and Eden observational study. Interest expense increased $167,000 primarily related to the Notes Payable, which was not outstanding in the same period in the prior year. Foreign exchange loss increased by $127,000 over the same period in the prior year, primarily related to FX loss on USD cash balances. Operating expenses for the nine months ended September 30, 2023, were $10,215,000, compared to $7,552,000 for the same period in the preceding year, an increase of $2,663, or 35.2%. The change is due to an increase in share-based compensation of $295,000. In addition, consulting and professional fees increased by $1,240,000 primarily due to increased site and patient fees related to the Tigris trial and Eden observational study. Interest expense increased $410,000 primarily related to the Notes Payable, which was not outstanding in the same period in the prior year. Lastly, loss incurred on joint arrangement was $205,000 which was not incurred for the same period in the prior year.  

Loss for the three months ended September 30, 2023 was $3,391,000, or $0.01 per share, compared to a loss of $3,135,000, or $0.01 per share, for the same quarter last year. The increased loss of $256,000 was due to increased operating expenses, partially offset by a reduction in loss from discontinued operations of $662,000 related to the reduction in Dialco operating expenses. Loss for the nine months ended September 30, 2023 was $9,107,000, or $0.02 per share, compared to a loss of $8,778,000, or $0.01 per share, for the same period last year. The increased loss of $329,000 was due to increased operating expenses, partially offset by a reduction in loss from discontinued operations of $2,215,000 related to the prior Dialco operating expenses.

The Company concluded the third quarter of 2023 with cash of $5,031,000 compared to $8,414,000 of cash on hand as of December 31, 2022.  

The total number of common shares outstanding for the Company was 278,576,261 at September 30, 2023.

About Spectral        

Spectral is a Phase 3 company seeking U.S. FDA approval for its unique product for the treatment of patients with septic shock, Toraymyxin™ (“PMX”). PMX is a therapeutic hemoperfusion device that removes endotoxin, which can cause sepsis, from the bloodstream and is guided by the Company’s Endotoxin Activity Assay (EAA™), the only FDA cleared diagnostic for the risk of developing sepsis.

PMX is approved for therapeutic use in Japan and Europe, and has been used safely and effectively on more than 340,000 patients to date. In March 2009, Spectral obtained the exclusive development and commercial rights in the U.S. for PMX, and in November 2010, signed an exclusive distribution agreement for this product in Canada. In July 2022, the U.S. FDA granted Breakthrough Device Designation for PMX for the treatment of endotoxic septic shock. Approximately 330,000 patients are diagnosed with septic shock in North America each year.

Spectral is listed on the Toronto Stock Exchange under the symbol EDT. For more information please visit www.spectraldx.com.

Forward-looking statement

Information in this news release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Implicit in this information, particularly in respect of the future outlook of Spectral and anticipated events or results, are assumptions based on beliefs of Spectral's senior management as well as information currently available to it. While these assumptions were considered reasonable by Spectral at the time of preparation, they may prove to be incorrect. Readers are cautioned that actual results are subject to a number of risks and uncertainties, including the company’s ability to raise capital and the availability of funds and resources to pursue R&D projects, the recruitment of additional clinical trial sites, the rate of patient enrollment, the successful and timely completion of clinical studies, the success of Baxter’s commercialization efforts, the ability of Spectral to take advantage of business opportunities in the biomedical industry, the granting of necessary approvals by regulatory authorities as well as general economic, market and business conditions, and could differ materially from what is currently expected.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this statement.

For further information, please contact:

Ali MahdaviDavid Waldman/Natalya RudmanBlair McInnis
Capital Markets & Investor RelationsUS Investor RelationsCFO
Spinnaker Capital Markets Inc.Crescendo Communications, LLCSpectral Medical Inc.
416-962-3300212-671-1020416-626-3233
This email address is being protected from spambots. You need JavaScript enabled to view it.This email address is being protected from spambots. You need JavaScript enabled to view it.This email address is being protected from spambots. You need JavaScript enabled to view it.
   

Spectral Medical Inc.
Condensed Interim Consolidated Statements of Financial Position
In CAD (000s), except for share and per share data
(Unaudited)

 September 30,
2023
December 31,
2022
 
 $ $ 
   
Assets  
Current assets  
Cash5,031 8,414 
Trade and other receivables720 1,056 
Inventories304 340 
Prepayments and other assets912 276 
 6,967 10,086 
Non-current assets  
Right-of-use-asset598 464 
Property and equipment165 237 
Intangible asset192 211 
Investment in iDialco794 998 
Total assets8,716 11,996 
   
Liabilities  
Current liabilities  
Trade and other payables2,314 3,167 
Current portion of contract liabilities757 696 
Current portion of lease liability121 96 
 3,192 3,959 
Non-current liability  
Lease liability535 420 
Non-current portion of contract liabilities3,509 4,011 
Notes payable11,631 6,129 
Total liabilities 18,867 14,519 
   
Shareholders’ deficiency  
Share capital87,061 87,050 
Contributed surplus8,916 8,773 
Share-based compensation10,197 8,908 
Warrants2,526 2,490 
Deficit(118,851)(109,744)
Total shareholders’ deficiency(10,151)(2,523)
Total liabilities and shareholders’ deficiency8,716 11,996 

Spectral Medical Inc.
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss
In CAD (000s), except for share and per share data
(Unaudited)

 Three-
months
ended
September
30, 2023
Three-
months
ended
September
30, 2022
Nine-
months
ended
September
30, 2023
Nine-
months
ended
September
30, 2022
 
 $  $ $  $
 
     
Revenue397 362 1,233 1,114 
     
Expenses    
Changes in inventories of finished goods
and work-in-process
- 71 - 160 
Raw materials and consumables used305 121 722 357 
Salaries and benefits987 891 2,918 2,555 
Consulting and professional fees1,198 933 3,300 2,060 
Regulatory and investor relations109 123 414 442 
Travel and entertainment63 78 245 197 
Facilities and communication81 81 245 218 
Insurance102 119 290 357 
Depreciation and amortization57 55 172 171 
Interest expense173 6 429 19 
Foreign exchange (gain) loss146 19 (89)30 
Share-based compensation340 217 1,300 1,005 
Other expense (income)56 (9)64 19 
Net Loss on joint arrangement41 - 205 - 
 3,658 2,705 10,215 7,552 
Loss and comprehensive loss for the year
from continuing operations
(3,261)(2,343) (8,982)

(6,438


)
Income (loss) from discontinued
operations
(130)(792)

(125


)


(2,340


)
Loss and comprehensive loss for the year(3,391)(3,135)(9,107)(8,778)
Basic and diluted loss from continuing
operations per common share
(0.01)(0.00)

(0.02


)
(0.01)
Basic and diluted income (loss) from
discontinued operations per common share
(0.00)(0.00)

(0.00


)
(0.00)
Basic and diluted loss per common
share
(0.01)(0.01)(0.02)(0.02)
Weighted average number of common
shares outstanding – basic and diluted
278,604,718 268,283,387 

278,569,902
 
268,064,079
 

Spectral Medical Inc.
Condensed Interim Consolidated Statements of Changes in Shareholders’ Deficiency
In CAD (000s)
(Unaudited)

 Number of
shares
 Share
Capital
 Contributed
surplus
 

Share-based
compensation
 WarrantsDeficitTotal
Shareholders’
(deficiency)

 
   $ $ $ $ $ $
 
Balance, January 1, 2022267,886,408 84,357 7,985 7,984 2,251 (98,494)4,083 
Share options exercised268,797 157 - (69)- - 88 
RSUs released284,072 174 - (174)- - - 
Warrants expired- - 788 - (788)- - 
Loss and comprehensive loss for the period- - - - - (8,778)(8,778)
Share-based compensation- - - 1,005 - - 1,005 
Balance, Sep 30, 2022268,439,277 84,688 8,773 8,746 1,463 (107,272)(3,602 
Bought deal offering10,061,250 2,313 - - 1,027 - 3,340 
RSU Released47,277 49 - (30)- - 19 
Loss and comprehensive loss for the period- - - - - (2,472)(2,472 
Share-based compensation- - - 192 - - 192 
Balance, December 31, 2022278,547,804 87,050 8,773 8,908 2,490 (109,744)(2,523 

 

Balance, January 1, 2023278,547,80487,0508,7738,908 2,490 (109,744)(2,523)
RSUs released28,45711-(11)- - - 
Warrants issued---- 179 - 179 
Warrants expired--143- (143)- - 
Loss and comprehensive loss
for the period
---- - (9,107)(9,107)
Share-based compensation---1,300 - - 1,300 
Balance, September 30, 2023278,576,26187,0618,91610,197 2,526 (118,851)(10,151)

Spectral Medical Inc.
Condensed Interim Consolidated Statements of Cash Flows
In CAD (000s)
(Unaudited)        

 Nine-months ended
Sep 30, 2023
Nine-months ended
Sep 30, 2022
 
 $ $ 
Cash flow provided by (used in)  
   
Operating activities  
Loss and comprehensive loss for the period(9,107)(8,778)
Adjustments for:  
Depreciation on right-of-use asset73 71 
Depreciation on property and equipment72 123 
Amortization of intangible asset19 13 
Amortization of deferred financing Fees147 - 
Interest expense 429 19 
Unrealized foreign exchange gain(38)(33)
Share-based compensation1,479 1,005 
Write down of property and equipment to fair value 91 
Loss on investment in iDialco205 - 
Changes in items of working capital:  
Trade and other receivables336 129 
Inventories36 (367)
Prepayments and other assets(636)77 
Trade and other payables(1,253)493 
Contract liabilities(648)(485)
Net cash used in operating activities(8,886)(7,642)
   
Investing activities  
Property and equipment acquisitions- (90)
Net cash used in investing activities- (90)
   
Financing activities  
Lease liability payments110 (88)
Note payable6,213  
Financing charges paid(820) 
Share options exercised- 88 
Net cash provided by financing activities5,503 - 
   
Decrease in cash(3,383)(7,732)
Effects of exchange rate changes on cash - 33 
Cash, beginning of period8,414 8,890 
Cash, end of period5,031 1,191 
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