SPECTRAL ANNOUNCES FOURTH QUARTER AND FISCAL 2019 RESULTS

Spectral Medical Inc., today announced its financial results for the fourth quarter and for the year ended December 31, 2019. Financial Review Revenue for the three months ended December 31, 2019 was $746,000 compared to $1,864,000 for the same three-month period last year. Revenue for the year ended December 31, 2019 was $2,868,000 compared

TORONTO, March 27, 2020 (GLOBE NEWSWIRE) -- Spectral Medical Inc., (TSX: EDT), a late stage theranostic company advancing therapeutic options for sepsis and septic shock, today announced its financial results for the fourth quarter and for the year ended December 31, 2019.

Financial Review

Revenue for the three months ended December 31, 2019 was $746,000 compared to $1,864,000 for the same three-month period last year. Revenue for the year ended December 31, 2019 was $2,868,000 compared to $3,840,000 for the prior year, representing a decrease of $972,000, or 25%.

For the quarter ended December 31, 2019, the Company reported operating costs of $2,160,000 compared to $1,420,000 for the corresponding period in 2018. Operating costs for the year ended December 31, 2019 amounted to $7,728,000 compared to $6,329,000 in 2018. Most of the Company’s expenses are incurred in its Phase III clinical trial and vary depending on the timing and level of patient enrolment. Apart from clinical trial activities, the Company continues to maintain a low cost operating structure for its base business operations.

Loss for the quarter ended December 31, 2019 was $1,414,000 ($0.006 per share) compared to income of $444,000 ($0.002 per share) for the same quarter last year. For the year ended December 31, 2019, the Company reported a loss of $4,860,000, ($0.02 per share), compared to a loss of $2,489,000 ($0.01 per share), for the year ended December 31, 2018.

The Company concluded the 2019 year with cash of $1,435,000 compared to $4,368,000 cash on hand as of December 31, 2018. This does not reflect the US$5,000,000 upfront rights payment from Baxter International Inc., which was received on February 21, 2020.

The total number of common shares outstanding for the Company was 225,876,683 as at December 31, 2019. 

About Spectral

Spectral is a Phase III 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 has been approved for therapeutic use in Japan and Europe, and has been used safely and effectively on more than 200,000 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. Approximately 330,000 patients are diagnosed with severe sepsis and septic shock in North America each year.

Spectral, through its wholly owned subsidiary, Dialco Medical Inc. (“Dialco”), is also commercializing a new proprietary platform, “SAMI”, targeting the renal replacement therapy (“RRT”) market.  Dialco is also seeking regulatory approval for “DIMI” which is based on the same RRT platform, but will be intended for home hemodialysis use.

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 availability of funds and resources to pursue R&D projects, the successful and timely completion of clinical studies, 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:

Dr. Paul Walker
President and CEO
Spectral Medical Inc.
416-626-3233 ext. 2100
pwalker@spectraldx.com
Mr. Chris Seto
CFO
Spectral Medical Inc.
416-626-3233 ext. 2004
cseto@spectraldx.com
Ali Mahdavi
Capital Markets &Investor Relations
416-962-3300
am@spinnakercmi.com

Spectral Medical Inc.
Consolidated Statements of Financial Position
(in thousands of Canadian dollars)

  December 31
2019
  December 31
2018
  $   $
       
Assets      
Current assets      
Cash 1,435   4,368
Trade and other receivables 271   1,433
Inventories 276   197
Prepayments and other assets 155   192
Contract assets 519   126
  2,656   6,316
Non-current assets      
Right-of-use-asset 719  
Property and equipment 368   377
Intangible asset 263   284
Total assets 4,006   6,977
       
Liabilities      
Current liabilities      
Trade and other payables 1,002   500
Contract liabilities   107
Current portion of lease liability 77  
  1,079   607
Non-current liability      
Lease liability 667  
Total liabilities 1,746   607
       
Equity      
Share capital 66,837   66,646
Contributed surplus 7,981   7,98
Share-based compensation 6,183   5,564
Warrants 1,870   1,930
Deficit (80,611)   (75,751)
Total equity 2,260   6,370
       
Total liabilities and equity 4,006   6,977

Spectral Medical Inc.
Consolidated Statements of Loss and Comprehensive Loss
For the years ended December 31, 2019 and 2018
(in thousands of Canadian dollars, except for share and per share data)

  2019     2018  
  $      $
       
Revenue 2,868     3,840  
       
Expenses      
Changes in inventories of finished goods and work-in-process 291     102  
Inventory write-down -     229  
Raw materials and consumables used 359     266  
Salaries and benefits 3,826     3,095  
Consulting and professional fees 1,499     1,308  
Regulatory and investor relations 514     461  
Travel and entertainment 326     129  
Facilities and communication 300     370  
Insurance 238     206  
Depreciation and amortization 278     230  
Interest expense on lease liability 36     -  
Foreign exchange loss (gain) 114     (74 )
Interest income (81 )   (13 )
Other expenses 28     20  
  7,728     6,329  
       
Loss and comprehensive loss for the year (4,860 )   (2,489 )
       
Basic and diluted loss per common share (0.02 )   (0.01 )
       
Weighted average number of common shares outstanding – basic and diluted      
225,731,215   220,172,675  

Spectral Medical Inc.
Consolidated Statements of Changes in Equity
For the years ended December 31, 2019 and 2018
(in thousands of Canadian dollars)

               
  Notes Issued capital Contributed
surplus
 

Share-based
compensation
  Warrants   Deficit     Total equity    
    Number $ $ $   $   $     $    
Balance, January 1, 2018   207,459,022 63,225 7,849 4,914   132   (73,262 ) 2,858    
Private placement 22 17,694,661 3,267 - -   1,930   -   5,197    
Share options exercised 16 437,500 154 - (63 ) -   -   91    
Warrant expiry 16 - - 132 -   (132 ) -   -    
Loss and comprehensive loss  for the year   - - - -   -   (2,489 ) (2,489 )  
Share-based compensation 16 - - - 713   -   -   713    
Balance, December 31, 2018   225,591,183 66,646 7,981 5,564   1,930   (75,751 ) 6,370  
Share options exercised 16 10,500 7 - (3 ) -   -   4  
Warrants exercised 16 275,000 184 - -   (60 ) -   124  
Loss and comprehensive loss for the year   - - - -   -   (4,860 ) (4,860  
Share-based compensation 16 - - - 622   -   -   622  
Balance, December 31, 2019   225,876,683 66,837 7,981 6,183   1,870   (80,611 ) 2,260  

Spectral Medical Inc.
Consolidated Statements of Cash Flows
For the years ended December 31, 2019 and 2018
(in thousands of Canadian dollars)

  2019     2018  
  $     $  
Cash flow provided by (used in)      
       
Operating activities      
Loss and comprehensive loss for the year (4,860 )   (2,489 )
Adjustments for:      
Depreciation on right-of-use asset 94     -  
Depreciation on property and equipment 163     205  
Amortization of intangible asset 21     25  
Interest expense on lease liability 36     -  
Unrealized foreign exchange loss (gain)on cash 57     (59 )
Share-based compensation 622     713  
Write down of property and equipment -     35  
Loss on disposal of property and equipment 7     -  
Changes in items of working capital:      
Trade and other  receivables 1,162     (552 )
Inventories (79 )   (6 )
Prepayments and other assets 37     (119 )
Contract assets (393 )   (126 )
Trade and other payables 502     (112 )
Contract liabilities (107 )   104  
Net cash used in operating activities (2,738 )   (2,381 )
       
Investing activities      
Property and equipment expenditures (161 )   (47 )
Net cash used in investing activities (161 )   (47 )
       
Financing activities      
Proceeds from private placement -     5,308  
Transaction costs paid -     (111 )
Lease liability payments (105 )   -  
Share options exercised 4     91  
Warrants exercised 124     -  
Net cash provided by financing activities 23     5,288  
       
(Decrease) increase in cash (2,876 )   2,860  
Effects of exchange rate changes on cash (57 )   59  
Cash, beginning of year 4,368     1,449  
Cash, end of year 1,435     4,368  

 

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