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Spectral Announces Second Quarter Results

T.EDT

Spectral Announces Second Quarter Results

TORONTO, ONTARIO--(Marketwired - Aug. 11, 2017) - Spectral Medical Inc., (TSX:EDT), a Phase III company developing the first treatment for patients with septic shock, today announced its unaudited financial results for the second quarter ended June 30, 2017.

Financial Review

Revenue for the three months ended June 30, 2017 was $1,090,000 compared to $870,000 for the same period in the preceding year. For the six months ended June 30, 2017 revenues were $2,031,000 compared to $1,932,000 in the first half of 2016. Revenues for both the quarter and the year 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 June 30, 2017 amounted to $2,205,000 compared to $4,393,000 in 2016. Operating costs for the six months ended were $4,108,000, a decrease of $4,354,000 from $8,462,000 for the first six months of 2016. The decrease is almost entirely attributable to lower costs for the EUPHRATES trial. The fourth and final module of the PMA submission was provided to the U.S. FDA in the second quarter of 2017 and accepted for substantive review on July 20, 2017. The Company continues to maintain a low cost operating structure for its base business operations.

For the three months ended June 30, 2017, the Company reported a loss of $1,115,000 ($0.005 per share) compared to a loss of $3,498,000 ($0.02 per share) for the three months ended June 30, 2016. The loss for the six months ended June 30, 2017 was $2,077,000 ($0.01 per share) compared to $6,492,000 ($0.03 per share) for the same six month period in the prior year.

The Company concluded the second quarter of 2017 with cash on hand of $2,912,000 compared to $5,080,000 as of December 31, 2016.

The total number of shares outstanding for the Company was 207,440,587 as at June 30, 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.

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)        
   
  June 30   December 31  
  2017   2016  
  $   $  
   
Assets        
Current assets        
Cash 2,912   5,080  
Trade and other receivables 953   642  
Inventories 276   244  
Prepayments and other assets 248   166  
  4,389   6,132  
Non-current assets        
Property and equipment 625   634  
Intangible asset 322   334  
  947   968  
   
Total assets 5,336   7,100  
   
Liabilities        
Current liabilities        
Trade and other payables 1,043   1,112  
Deferred revenue 96   166  
Total liabilities 1,139   1,278  
   
Equity        
Share capital 63,214   63,084  
Contributed surplus 7,849   7,849  
Share-based compensation 4,425   4,103  
Warrants 132   132  
Deficit (71,423 ) (69,346 )
Total equity 4,197   5,822  
         
Total liabilities and equity 5,336   7,100  
         
Spectral Medical Inc.  
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss  
For the six months ended June 30, 2017 and 2016  
(Unaudited)  
   
(in thousands of Canadian dollars, except for share and per share data)  
   
  Three months ended   Six months ended  
      June 30       June 30  
  2017   2016   2017   2016  
      $       $  
   
Revenue 1,090   870   2,031   1,932  
   
Expenses                
Changes in inventories of finished goods and work- in-process 111   58   126   83  
Raw materials and consumables used 59   95   111   298  
Employee benefits 804   956   1,884   2,109  
Product development -   67   50   67  
Consulting and professional fees 884   2,558   1,204   4,629  
Regulatory and investor relations 65   201   161   408  
Travel and entertainment 59   261   145   470  
Depreciation and amortization 58   49   112   91  
Foreign exchange loss 31   15   34   30  
Other expenses 134   133   281   277  
  2,205   4,393   4,108   8,462  
   
Operating loss (1,115 ) (3,523 ) (2,077 ) (6,530 )
   
Finance income -   25   -   38  
   
Loss and comprehensive loss for the period (1,115 ) (3,498 ) (2,077 ) (6,492 )
   
Basic and diluted loss per common share (0.005 ) (0.02 ) (0.01 ) (0.03 )
   
Weighted average number of common shares outstanding 207,249,708   206,733,209   207,207,879   202,374,503  
                 
Spectral Medical Inc.
Condensed Interim Consolidated Statements of Changes in Equity
For the six months ended June 30, 2017 and 2016
(Unaudited)
 
(in thousands of Canadian dollars)
 
      Contributed Share-based        
  Issued capital surplus compensation   Warrants Deficit Total 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 9,163 - -   236 - 9,399
Share options exercised 855,000 458 - (192)   - - 266
Loss and comprehensive loss for the period - - - -   - (6,492) (6,492)
Share-based compensation - - - 459   - - 459
Balance, June 30, 2016 206,733,209 62,679 7,849 3,990   236 (65,689) 9,065
 
Balance, January 1, 2017 207,165,587 63,084 7,849 4,103   132 (69,346) 5,822
Share options exercised 275,000 130 - (53)   - - 77
Loss and comprehensive loss for the period - - - -   - (2,077) (2,077)
Share-based compensation - - - 375   - - 375
Balance, June 30, 2017 207,440,587 63,214 7,849 4,425   132 (71,423) 4,197
                 
Spectral Medical Inc.  
Condensed Interim Consolidated Statements of Cash Flows  
For the six months ended June 30, 2017 and 2016  
(Unaudited)  
   
(in thousands of Canadian dollars)        
      Six months ended  
  2017   2016  
  $   $  
Cash flow provided by (used in)        
         
Operating activities        
Loss and comprehensive loss for the period (2,077 ) (6,492 )
Adjustments for:        
  Depreciation on property and equipment 100   79  
  Amortization of intangible asset 12   12  
  Share-based compensation 375   459  
  (Gain)loss on disposal of property and equipment (15 ) 4  
Changes in items of working capital :        
  Trade and other receivables (311 ) (122 )
  Inventories (32 ) (193 )
  Prepayments and other assets (82 ) (123 )
  Trade and other payables (69 ) 537  
  Deferred revenue (70 ) (71 )
Net cash used in operating activities (2,169 ) (5,910 )
         
Investing activities        
Property and equipment expenditures (91 ) (80 )
Proceeds on disposal of property and equipment 15   -  
Net cash used in investing activities (76 ) (80 )
         
Financing activities        
Bought deal prospectus offering -   9,399  
Share options exercised 77   266  
Net cash provided by financing activities 77   9,665  
         
(Decrease)increase in cash (2,168 ) 3,675  
         
Cash, beginning of period 5,080   6,369  
Cash, end of period 2,912   10,044  

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

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