I’m surprised Spectral hasn’t announced by now how they will fund operations for at least the remainder of 2022 and through the first quarter of 2023. I continue to believe Spectral will be out of cash by mid October 2022.
Based on the updated Investor Presentation on Spectral’s website it appears that the worse case scenario for reaching the “interim patient enrollment” for the Phase 3b trial will be by the end of March 2023. According to the Presentation, Baxter will give Spectral a milestone payment at that time. The amount of that payment is not publicly known but I would hope it will be $6 million at a minimum and hopefully twice that amount. A $12 million payment from Baxter would cover expenses for the PMX trial and Dialco’s in home test though first quarter 2024.
At a minimum I believe Spectral needs an additional $6 to $7 million to get funding to cover operating expenses through March 31, 2023. Furthermore, I think there are only four ways to raise funding at this time.
-
Sell enough Spectral shares to raise $6 or $7 million and further dilute shareholder value.
-
Receive an advance from Baxter on the interim enrollment payment for PMX.
-
Find a company like Baxter (or Baxter) that would give Spectral an up front payment to Dialco for distribution rights for Sami and Dimi.
-
Find a lending institution that will loan Spectral $6 or $7 million based on the perceived value of Spectral’s current FDA approvals and future prospects of further FDA approvals based on not “if” but “when”.
There may be a fifth option that Spectral’s new CFO might be able to arrange for additional financing?
The closer we get to the end of September without Spectral announcing the sale of additional Spectral shares to raise more cash, the more inclined I am to think they will come up with funding from an alternative source.