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Spectral Announces Second Quarter Results

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TORONTO, Aug. 14, 2018 (GLOBE NEWSWIRE) -- Spectral Medical Inc., (TSX:EDT), a Phase III company developing the first treatment for patients with septic shock guided by a companion diagnostic, today announced its unaudited financial results for the second quarter ended June 30, 2018.

Financial Review

Revenue for the three-months ended June 30, 2018 was $234,000 compared to $1,055,000 for the same period in the preceding year. For the six-months ended June 30, 2018 revenues were $1,397,000 compared to $1,965,000 in the first half of 2017. Royalty revenue from one customer has decreased from $880 (US$659) to $117 (US$91) for the first six months of 2018, due to the expiry of certain patents. All royalty revenue contracts related to the Company's biological reagents will expire by the end of 2019. The Company is currently in the process of discussing potential technology transfers and other commercial options in respect of the underlying reagents to partially mitigate the short term revenue loss.

Operating costs for the quarter ended June 30, 2018 amounted to $1,744,000 compared to $2,205,000 in 2017. Operating costs for the six-months ended were $3,621,000, a decrease of $487,000 from $4,108,000 for the first six months of 2017. Most of the Company's expenses are incurred in its Phase III clinical trial and regulatory program and will vary depending on the timing and determination of the regulatory path forward. Apart from clinical trial and regulatory activities, the Company continues to maintain a low cost operating structure for its base business operations.

For the three-months ended June 30, 2018, the Company reported a loss of $1,510,000 ($0.007 per share) compared to a loss of $1,150,000 ($0.006) for the three-months ended June 30, 2017. The loss for the six-months ended June 30, 2018 was $2,224,000 ($0.010 per share) compared to $2,143,000 ($0.010 per share) for the same six-month period in the prior year.

The Company concluded the second quarter of 2018 with cash on hand of $5,222,000 compared to $1,449,000 as of December 31, 2017.

The total number of shares outstanding for the Company was 225,591,183 as at June 30, 2018.

The Company continues to dialogue with the FDA concerning the pathway forward for its targeted therapy for septic shock.

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 150,000 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 350,000 patients are diagnosed with severe sepsis and 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 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:

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


Spectral Medical Inc.
Condensed Interim Consolidated Statements of Financial Position
(Unaudited)

(in thousands of Canadian dollars)

  June 30
2018
    December 31
2017
    January 01
2017
 
        Restated     Restated  
  $     $     $  
           
Assets          
Current assets          
Cash 5,222     1,449     5,080  
Trade and other receivables 555     881     642  
Inventories 232     191     244  
Prepayments and other assets 293     73     166  
Contract asset 126     -     -  
  6,428     2,594     6,132  
Non-current assets          
Property and equipment 504     570     634  
Intangible asset 297     309     334  
           
Total assets 7,229     3,473     7,100  
           
Liabilities          
Current liabilities          
Trade and other payables 611     612     1,112  
Contract liability 3     3     6  
Total liabilities 614     615     1,118  
           
Equity          
Share capital 66,646     63,225     63,084  
Contributed surplus 7,981     7,849     7,849  
Share-based compensation 5,544     4,914     4,103  
Warrants 1,930     132     132  
Deficit (75,486 )   (73,262 )   (69,186 )
Total equity 6,615     2,858     5,982  
           
Total liabilities and equity 7,229     3,473     7,100  
                 


Spectral Medical Inc.
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss
For the six-months ended June 30, 2018 and 2017
(Unaudited)

(in thousands of Canadian dollars, except for share and per share data)

  Three-months ended
    Six-months ended
 
  2018   2017     2018   2017  
    Restated         Restated  
    $          $  
           
Revenue 234   1,055     1,397   1,965  
           
Expenses          
Changes in inventories of finished goods and work- in-process 32   111     56   126  
Inventory write-down 38   -     38   -  
Raw materials and consumables used 57   59     125   111  
Salaries and benefits 739   804     1,904   1,884  
Consulting and professional fees 486   884     696   1,204  
Product development 66   -     66   50  
Regulatory and investor relations 81   65     279   161  
Travel and entertainment 34   59     62   145  
Depreciation and amortization 58   58     120   112  
Foreign exchange (gain) loss 8   31     (22 ) 34  
Other expenses 145   134     297   281  
  1,744   2,205     3,621   4,108  
           
Loss and comprehensive loss for the period (1,510 ) (1,150 )   (2,224 ) (2,143 )
           
Basic and diluted loss per Share (0.007 ) (0.006 )   (0.010 ) (0.010 )
           
Weighted average number of Shares outstanding 221,666,203   207,249,708     214,664,360   207,207,879  
                   


Spectral Medical Inc.
Condensed Interim Consolidated Statements of Changes in Equity
For the six-months ended June 30, 2018 and 2017
(Unaudited)

(in thousands of Canadian dollars)

  Issued capital   Contributed
surplus
  Share-based
compensation
  Warrants   Deficit   Total equity  
  Number   $   $   $   $   $   $  
Balance, January 1, 2017 207,165,587   63,084   7,849   4,103   132   (69,346 ) 5,822  
Change in accounting policies -   -   -   -   -   160   160  
Restated equity, January 1, 2017 207,165,587   63,084   7,849   4,103   132   (69,186 ) 5,982  
Share options exercised 275,000   130   -   (53 ) -   -   77  
Loss and comprehensive loss  for the period, restated -   -   -   -   -   (2,143 ) (2,143 )
Share-based compensation -   -   -   375   -   -   375  
Balance, June 30, 2017 207,440,587   63,214   7,849   4,425   132   (71,329 ) 4,291  
Share options exercised 18,435   11   -   (4 ) -   -   7  
Loss and comprehensive loss  for the period, restated -   -   -   -   -   (1,933 ) (1,933 )
Share-based compensation -   -       493     -   493  
Balance, December 31, 2017 207,459,022   63,225   7,849   4,914   132   (73,262 ) 2,858  
                   
Balance, January 1, 2018 207,459,022   63,225   7,849   4,914   132   (73,262 ) 2,858  
Private placement 17,694,661   3,267   -   -   1,930   -   5,197  
Share options exercised 437,500   154   -   (63 ) -   -   91  
Warrant expiry -   -   132   -   (132 ) -   -  
Loss and comprehensive loss for the period -   -   -   -   -   (2,224 ) (2,224 )
Share-based compensation -   -   -   693   -   -   693  
Balance, June 30, 2018 225,591,183   66,646   7,981   5,544   1,930   (75,486 ) 6,615  
                             

 

Spectral Medical Inc.
Condensed Interim Consolidated Statements of Cash Flows
For the six-months ended June 30, 2018 and 2017
(Unaudited)

(in thousands of Canadian dollars)

  2018     2017  
        Restated  
  $     $  
Cash flow provided by (used in)      
       
Operating activities      
Loss and comprehensive loss for the period (2,224 )   (2,143 )
Adjustments for:      
Depreciation on property and equipment 107     100  
Amortization of intangible asset 12     12  
Share-based compensation 693     375  
Gain on disposal of property and equipment -     (15 )
Changes in items of working capital :      
Trade and other receivables 326     (311 )
Inventories (41 )   (32 )
Prepayments and other assets (220 )   (82 )
Contract asset (126 )   -  
Trade and other payables (1 )   (69 )
Contract liability -     (4 )
Net cash used in operating activities (1,474 )   (2,169 )
       
Investing activities      
Purchase of property and equipment (41 )   (91 )
Proceeds on disposal of property and equipment -     15  
Net cash used in investing activities (41 )   (76 )
       
Financing activities      
Proceeds from private placement 5,308     -  
Transaction costs paid (111 )   -  
Proceeds from Share options exercised 91     77  
Net cash provided by financing activities 5,288     77  
       
Increase (decrease) in cash 3,773     (2,168 )
       
Cash, beginning of period 1,449     5,080  
Cash, end of period 5,222     2,912  

 

 

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