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Spectral Announces Second Quarter Results

20:00 EDT 14 Aug 2019 | Globe Newswire

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   
Cash3,800  4,368 
Trade and other receivables313  1,433 
Inventories295  197 
Prepayments and other assets391  192 
Contract asset-  126 
 4,799  6,316 
Non-current assets   
Right-of-use-asset766  - 
Property and equipment335  377 
Intangible asset272  284 
Total assets6,172  6,977 
    
Liabilities   
Current liabilities   
Trade and other payables472  500 
Contract liability146  107 
Current portion of lease liability73  - 
 691  607 
Non-current liability   
Lease liability707  - 
Total liabilities1,398  607 
    
Equity    
Share capital66,796  66,646 
Contributed surplus7,981  7,981 
Share-based compensation5,912  5,564 
Warrants1,881  1,930 
Deficit(77,796) (75,751)
Total equity4,774  6,370 
    
Total liabilities and equity6,172  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  
  $  $   $  $  
       
Revenue1,041 234  1,588 1,397  
       
Expenses      
Changes in inventories of finished goods and work- in-process136 32  211 57  
Inventory write-down- 38  - 38  
Raw materials and consumables used87 57  147 125  
Salaries and benefits951 739  1,660 1,904  
Consulting and professional fees381 552  641 762  
Regulatory and investor relations191 81  277 279  
Travel and entertainment74 34  162 62  
Depreciation and amortization69 58  140 119  
Foreign exchange loss (gain)63 8  105 (22) 
Interest expense on lease liability10 -  19 -  
Other expenses131 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 outstanding225,675,249 221,666,203  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 capitalContributed surplusShare-based compensation Warrants Deficit Total equity 
 Number$$$ $ $ $ 
Balance, January 1, 2018207,459,02263,2257,8494,914 132 (73,262)2,858 
Private placement17,694,6613,267-- 1,930 - 5,197 
Share options exercised437,500154-(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, 2018225,591,18366,6467,9815,544 1,930 (75,486)6,615 
Loss and comprehensive loss for the period---- - (265)(265)
Share-based compensation---20 - - 20 
Balance, December 31, 2018225,591,18366,6467,9815,564 1,930 (75,751)6,370 
        
Balance, January 1, 2019225,591,18366,6467,9815,564 1,930 (75,751)6,370 
Warrants exercised225,000150-- (49)- 101 
Loss and comprehensive loss for the period---- - (2,045)(2,045)
Share-based compensation---348 - - 348 
Balance, June 30, 2019225,816,18366,7967,9815,912 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 asset47  - 
Depreciation on property and equipment81  107 
Amortization of intangible asset12  12 
Interest expense on lease liability19  - 
Share-based compensation348  693 
Loss on disposal of property and equipment7  - 
Changes in items of working capital :   
Trade and other receivables1,120  326 
Inventories(98)   (41)
Prepayments and other assets(199) (220)
Contract asset126  (126)
Trade and other payables(28) (1)
Contract liability39  - 
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 exercised101  - 
Net cash provided by financing activities49  5,288 
    
(Decrease) increase in cash(568) 3,773 
    
Cash, beginning of period4,368  1,449 
Cash, end of period3,800  5,222 

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