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Spectral Announces Second Quarter Results

/EIN News/ -- TORONTO, Aug. 15, 2019 (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, 2019.

Financial Review

Revenue for the three-months ended June 30, 2019 was $1,041,000 compared to $234,000 for the same three-month period last year. For the six-months, ended June 30, 2019, revenues were $1,588,000 compared to $1,397,000 in the first half of 2018.The increase is due to the completion of certain performance obligations related to the licensing and technology transfer agreement entered into at the end of 2018. The increase was offset, in part, by a reduction in royalty revenue generated from contacts related to the Company’s biological reagents that expired at the end of 2018.

Operating costs for the quarter ended June 30, 2019 were $2,093,000 compared to $1,744,000 for the same period in 2018. Operating costs for the six-months ended June 30, 2019 were $3,633,000, an increase of $12,000 from $3,621,000. The fluctuation is primarily due to the timing and a reduction in the amount for share compensation expense. Share options were granted in the second quarter of 2019, whereas share options were granted in the first quarter of 2018. Operating costs are expected to increase once Tigris trial activities commence. The Company continues to maintain a low cost operating structure for its base business operations.

For the three-months ended June 30, 2019, the Company reported a loss of $1,052,000 ($0.005 per share) compared to a loss of $1,510,000 ($0.007 per share) for the three-months ended June 30, 2018. The loss for the six-months ended June 30, 2019 was $2,045,000 ($0.009 per share) compared to $2,224,000 ($0.01 per share) for the same six-month period in the prior year.

The Company concluded the second quarter of 2019 with cash on hand of $3,800,000 compared to $4,368,000 as of December 31, 2018.

The total number of shares outstanding for the Company was 225,816,183 as at June 30, 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 170,000 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, 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:

Paul Walker
President and CEO
Spectral Medical Inc.
416-626-3233 ext. 2100
pwalker@spectraldx.com
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
Tony Hesby
780-904-9041
tony.hesby@outlook.com


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

(in thousands of Canadian dollars)
  June 30, 2019     December 31, 2018  
  $     $  
       
Assets      
Current assets      
Cash 3,800     4,368  
Trade and other receivables 313     1,433  
Inventories 295     197  
Prepayments and other assets 391     192  
Contract asset -     126  
  4,799     6,316  
Non-current assets      
Right-of-use-asset 766     -  
Property and equipment 335     377  
Intangible asset 272     284  
Total assets 6,172     6,977  
       
Liabilities      
Current liabilities      
Trade and other payables 472     500  
Contract liability 146     107  
Current portion of lease liability 73     -  
  691     607  
Non-current liability      
Lease liability 707     -  
Total liabilities 1,398     607  
       
Equity      
Share capital 66,796     66,646  
Contributed surplus 7,981     7,981  
Share-based compensation 5,912     5,564  
Warrants 1,881     1,930  
Deficit (77,796 )   (75,751 )
Total equity 4,774     6,370  
       
Total liabilities and equity 6,172     6,977  
 


Spectral Medical Inc.
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss
For the six-months ended June 30, 2019 and 2018
(Unaudited)

(in thousands of Canadian dollars, except for share and per share data)
 
  Three-months ended
    Six-months ended
   
  2019   2018     2019   2018    
   $    $      $    $    
             
Revenue 1,041   234     1,588   1,397    
             
Expenses            
Changes in inventories of finished goods and work- in-process 136   32     211   57    
Inventory write-down -   38     -   38    
Raw materials and consumables used 87   57     147   125    
Salaries and benefits 951   739     1,660   1,904    
Consulting and professional fees 381   552     641   762    
Regulatory and investor relations 191   81     277   279    
Travel and entertainment 74   34     162   62    
Depreciation and amortization 69   58     140   119    
Foreign exchange loss (gain) 63   8     105   (22 )  
Interest expense on lease liability 10   -     19   -    
Other expenses 131   145     271   297    
  2,093   1,744     3,633   3,621    
             
             
Loss and comprehensive loss for the period (1,052 ) (1,510 )   (2,045 ) (2,224 )  
             
Basic and diluted loss per common share (0.005 ) (0.007 )   (0.009 ) (0.010 )  
             
Weighted average number of common shares outstanding 225,675,249   221,666,203     225,633,448   214,664,360    
 


Spectral Medical Inc.
Condensed Interim Consolidated Statements of Changes in Equity
For the six-months ended June 30, 2019 and 2018
(Unaudited)

(in thousands of Canadian dollars)
 
  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 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  
Loss and comprehensive loss for the period - - - -   -   (265 ) (265 )
Share-based compensation - - - 20   -   -   20  
Balance, December 31, 2018 225,591,183 66,646 7,981 5,564   1,930   (75,751 ) 6,370  
               
Balance, January 1, 2019 225,591,183 66,646 7,981 5,564   1,930   (75,751 ) 6,370  
Warrants exercised 225,000 150 - -   (49 ) -   101  
Loss and comprehensive loss for the period - - - -   -   (2,045 ) (2,045 )
Share-based compensation - - - 348   -   -   348  
Balance, June 30, 2019 225,816,183 66,796 7,981 5,912   1,881   (77,796 ) 4,774  
 


Spectral Medical Inc.
Condensed Interim Consolidated Statements of Cash Flows
For the six-months ended June 30, 2019 and 2018
(Unaudited)

(in thousands of Canadian dollars)
 
  2019     2018  
  $     $  
Cash flows provided by (used in)      
       
Operating activities      
Loss and comprehensive loss for the period (2,045 )   (2,224 )
Adjustments for:      
Depreciation on right-of-use asset 47     -  
Depreciation on property and equipment 81     107  
Amortization of intangible asset 12     12  
Interest expense on lease liability 19     -  
Share-based compensation 348     693  
Loss on disposal of property and equipment 7     -  
Changes in items of working capital :      
Trade and other receivables 1,120     326  
Inventories (98 )     (41 )
Prepayments and other assets (199 )   (220 )
Contract asset 126     (126 )
Trade and other payables (28 )   (1 )
Contract liability 39     -  
Net cash provided by (used in) operating activities (571 )   (1,474 )
       
Investing activities      
Property and equipment expenditures (46 )   (41 )
Net cash used in investing activities (46 )   (41 )
       
Financing activities      
Proceeds from private placement -     5,308  
Transaction costs paid -     (111 )
Lease liability payments (52 )   -  
Share options exercised -     91  
Warrants exercised 101     -  
Net cash provided by financing activities 49     5,288  
       
(Decrease) increase in cash (568 )   3,773  
       
Cash, beginning of period 4,368     1,449  
Cash, end of period 3,800     5,222  

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