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Spectral Announces First Quarter Results

T.EDT

Spectral Announces First Quarter Results

TORONTO, ONTARIO--(Marketwired - May 12, 2017) - 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 first quarter ended March 31, 2017.

Financial Review

Revenue for the three months ended March 31, 2017 was $941,000 compared to $1,062,000 for the same three month period last year. First quarter revenues were consistent with prior year levels and this trend is expected to continue for the remainder of the year.

Operating costs for the quarter ended March 31, 2017 were $1,903,000 compared to $4,069,000 in 2016. As the Company's Phase III clinical trial nears its conclusion, the related expenses have declined significantly. The Company continues to maintain a low cost operating structure for its base business operations and believes that it has adequate cash on hand to fund its regulatory program and operations through the end of the first quarter of 2018.

Loss for the quarter ended March 31, 2017 was $962,000 ($0.005 per share) compared to $2,994,000 ($0.02 per share) for the same quarter last year.

The Company concluded the first quarter of 2017 with cash on hand of $3,714,000 compared to $5,080,000 as of December 31, 2016.

The total number of shares outstanding for the Company was 207,165,587 as at March 31, 2017.

Business Update

The Company expects to file the fourth and final module of its PMA submission to the United States Food and Drug Administration in the second quarter and plans to make an announcement when the submission has been filed and to disclose further clinical data at that time.

The Company also expects to submit a manuscript for publication in a major medical journal and to present trial results at a major medical conference before the end of June 2017.

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.

 
Spectral Medical Inc.
Condensed Interim Consolidated Statements of Financial Position
(Unaudited)
             
(in thousands of Canadian dollars)            
   
    March 31     December 31  
    2017     2016  
    $     $  
   
Assets            
Current assets            
Cash   3,714     5,080  
Trade and other receivables   792     642  
Inventories   259     244  
Prepayments and other assets   299     166  
    5,064     6,132  
Non-current assets            
Property and equipment   667     634  
Intangible asset   328     334  
    995     968  
   
Total assets   6,059     7,100  
   
Liabilities            
Current liabilities            
Trade and other payables   758     1,112  
Deferred revenue   131     166  
Total liabilities   889     1,278  
   
Equity            
Share capital   63,084     63,084  
Contributed surplus   7,849     7,849  
Share-based compensation   4,413     4,103  
Warrants   132     132  
Deficit   (70,308 )   (69,346 )
Total equity   5,170     5,822  
   
Total liabilities and equity   6,059     7,100  
 
Spectral Medical Inc.
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss For the three months ended March 31, 2017 and 2016
(Unaudited)
(in thousands of Canadian dollars, except for share and per share data)
             
    2017     2016  
    $     $  
Revenue   941     1,062  
Expenses            
Changes in inventories of finished goods and work-in-process   15     25  
Raw materials and consumables used   52     203  
Employee benefits   1,080     1,153  
Consulting and professional fees   320     2,071  
Product development   50     -  
Regulatory and investor relations   96     207  
Travel and entertainment   86     209  
Depreciation and amortization   54     42  
Foreign exchange loss   3     15  
Other expenses   147     144  
    1,903     4,069  
   
Operating loss   (962 )   (3,007 )
Finance income   -     13  
   
Loss and comprehensive loss for the period   (962 )   (2,994 )
   
Basic and diluted loss per common share   (0.005 )   (0.02 )
   
Weighted average number of common shares outstanding   207,165,587     198,015,803  
 
Spectral Medical Inc.
Condensed Interim Consolidated Statements of Changes in Equity For the three months ended March 31, 2017 and 2016
(Unaudited)
 
(in thousands of Canadian dollars)
                                   
            Contributed   Share-based               Total  
    Issued capital       surplus   compensation     Warrants   Deficit     equity  
    Number   $   $   $     $   $     $  
Balance, January 1, 2016   190,771,405   53,058   7,849   3,723     -   (59,197 )   5,433  
Bought deal prospectus offering   15,106,804   9,402   -   -     -   -     9,402  
Share options exercised   855,000   458   -   (192 )   -   -     266  
Loss and comprehensive loss for the period  
-
 
-
 
-
 
-
   
-
 
(2,994

)
 
(2,994

)
Share-based compensation   -   -   -   359     -   -     359  
Balance, March 31, 2016   206,733,209   62,918   7,849   3,890     -   (62,191 )   12,466  
   
Balance, January 1, 2017   207,165,587   63,084   7,849   4,103     132   (69,346 )   5,822  
Loss and comprehensive loss for the period  
-
 
-
 
-
 
-
   
-
 
(962

)
 
(962

)
Share-based compensation   -   -   -   310     -   -     310  
Balance, March 31, 2017   207,165,587   63,084   7,849   4,413     132   (70,308 )   5,170  
Spectral Medical Inc.
Condensed Interim Consolidated Statements of Cash Flows For the three months ended March 31, 2017 and 2016
(Unaudited)
             
(in thousands of Canadian dollars)            
    2017     2016  
    $     $  
Cash flow provided by (used in)            
Operating activities            
Loss and comprehensive loss for the period   (962 )   (2,994 )
Adjustments for:            
  Depreciation on property and equipment   48     35  
  Amortization of intangible asset   6     6  
  Share-based compensation   310     359  
Changes in items of working capital :            
  Trade and other receivables   (150 )   (256 )
  Inventories   (15 )   (82 )
  Prepayments and other assets   (133 )   (160 )
  Trade and other payables   (354 )   (22 )
  Deferred revenue   (35 )   (9 )
Net cash used in operating activities   (1,285 )   (3,123 )
Investing activities            
Property and equipment expenditures   (81 )   (53 )
Net cash used in investing activities   (81 )   (53 )
Financing activities            
Bought deal prospectus offering   -     9,402  
Share options exercised   -     266  
Net cash provided by financing activities   -     9,668  
(Decrease)increase in cash   (1,366 )   6,492  
Cash, beginning of period   5,080     6,369  
Cash, end of period   3,714     12,861  

Spectral Medical Inc.
Anthony Businskas
Executive Vice President and CFO
416-626-3233 ext. 2200
tbusinskas@spectraldx.com

Ali Mahdavi
Capital Markets & Investor Relations
416-962-3300
am@spinnakercmi.com