TORONTO, March 27, 2020 (GLOBE NEWSWIRE) -- Spectral Medical Inc., (TSX: EDT), a late stage theranostic company advancing therapeutic options for sepsis and septic shock, today announced its financial results for the fourth quarter and for the year ended December 31, 2019.

Financial Review

Revenue for the three months ended December 31, 2019 was $746,000 compared to $1,864,000 for the same three-month period last year. Revenue for the year ended December 31, 2019 was $2,868,000 compared to $3,840,000 for the prior year, representing a decrease of $972,000, or 25%.

For the quarter ended December 31, 2019, the Company reported operating costs of $2,160,000 compared to $1,420,000 for the corresponding period in 2018. Operating costs for the year ended December 31, 2019 amounted to $7,728,000 compared to $6,329,000 in 2018. Most of the Company’s expenses are incurred in its Phase III clinical trial and vary depending on the timing and level of patient enrolment. Apart from clinical trial activities, the Company continues to maintain a low cost operating structure for its base business operations.

Loss for the quarter ended December 31, 2019 was $1,414,000 ($0.006 per share) compared to income of $444,000 ($0.002 per share) for the same quarter last year. For the year ended December 31, 2019, the Company reported a loss of $4,860,000, ($0.02 per share), compared to a loss of $2,489,000 ($0.01 per share), for the year ended December 31, 2018.

The Company concluded the 2019 year with cash of $1,435,000 compared to $4,368,000 cash on hand as of December 31, 2018. This does not reflect the US$5,000,000 upfront rights payment from Baxter International Inc., which was received on February 21, 2020.

The total number of common shares outstanding for the Company was 225,876,683 as at December 31, 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 200,000 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 330,000 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:

Dr. Paul Walker
President and CEO
Spectral Medical Inc.
416-626-3233 ext. 2100
pwalker@spectraldx.com
Mr. 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

Spectral Medical Inc.
Consolidated Statements of Financial Position
(in thousands of Canadian dollars)

 December 31
2019
 December 31
2018
 $ $
    
Assets   
Current assets   
Cash1,435 4,368
Trade and other receivables271 1,433
Inventories276 197
Prepayments and other assets155 192
Contract assets519 126
 2,656 6,316
Non-current assets   
Right-of-use-asset719 
Property and equipment368 377
Intangible asset263 284
Total assets4,006 6,977
    
Liabilities   
Current liabilities   
Trade and other payables1,002 500
Contract liabilities 107
Current portion of lease liability77 
 1,079 607
Non-current liability   
Lease liability667 
Total liabilities1,746 607
    
Equity    
Share capital66,837 66,646
Contributed surplus7,981 7,98
Share-based compensation6,183 5,564
Warrants1,870 1,930
Deficit(80,611) (75,751)
Total equity2,260 6,370
    
Total liabilities and equity4,006 6,977

Spectral Medical Inc.
Consolidated Statements of Loss and Comprehensive Loss
For the years ended December 31, 2019 and 2018
(in thousands of Canadian dollars, except for share and per share data)

 2019  2018 
 $   $
    
Revenue2,868  3,840 
     
Expenses   
Changes in inventories of finished goods and work-in-process291  102 
Inventory write-down-  229 
Raw materials and consumables used359  266 
Salaries and benefits3,826  3,095 
Consulting and professional fees1,499  1,308 
Regulatory and investor relations514  461 
Travel and entertainment326  129 
Facilities and communication300  370 
Insurance238  206 
Depreciation and amortization278  230 
Interest expense on lease liability36  - 
Foreign exchange loss (gain)114  (74)
Interest income(81) (13)
Other expenses28  20 
 7,728  6,329 
    
Loss and comprehensive loss for the year(4,860) (2,489)
    
Basic and diluted loss per common share(0.02) (0.01)
    
Weighted average number of common shares outstanding – basic and diluted   
225,731,215 220,172,675 

Spectral Medical Inc.
Consolidated Statements of Changes in Equity
For the years ended December 31, 2019 and 2018
(in thousands of Canadian dollars)

        
 NotesIssued capitalContributed
surplus
 

Share-based
compensation
 Warrants Deficit  Total equity  
  Number$$$ $ $  $  
Balance, January 1, 2018 207,459,02263,2257,8494,914 132 (73,262)2,858  
Private placement2217,694,6613,267-- 1,930 - 5,197  
Share options exercised16437,500154-(63)- - 91  
Warrant expiry16--132- (132)- -  
Loss and comprehensive loss  for the year ---- - (2,489)(2,489) 
Share-based compensation16---713 - - 713  
Balance, December 31, 2018 225,591,18366,6467,9815,564 1,930 (75,751)6,370 
Share options exercised1610,5007-(3)- - 4 
Warrants exercised16275,000184-- (60)- 124 
Loss and comprehensive loss for the year ---- - (4,860)(4,860 
Share-based compensation16---622 - - 622 
Balance, December 31, 2019 225,876,68366,8377,9816,183 1,870 (80,611)2,260 

Spectral Medical Inc.
Consolidated Statements of Cash Flows
For the years ended December 31, 2019 and 2018
(in thousands of Canadian dollars)

 2019  2018 
 $  $ 
Cash flow provided by (used in)   
    
Operating activities   
Loss and comprehensive loss for the year(4,860) (2,489)
Adjustments for:   
Depreciation on right-of-use asset94  - 
Depreciation on property and equipment163  205 
Amortization of intangible asset21  25 
Interest expense on lease liability36  - 
Unrealized foreign exchange loss (gain)on cash57  (59)
Share-based compensation622  713 
Write down of property and equipment-  35 
Loss on disposal of property and equipment7  - 
Changes in items of working capital:   
Trade and other  receivables1,162  (552)
Inventories(79) (6)
Prepayments and other assets37  (119)
Contract assets(393) (126)
Trade and other payables502  (112)
Contract liabilities(107) 104 
Net cash used in operating activities(2,738) (2,381)
    
Investing activities   
Property and equipment expenditures(161) (47)
Net cash used in investing activities(161) (47)
    
Financing activities   
Proceeds from private placement-  5,308 
Transaction costs paid-  (111)
Lease liability payments(105) - 
Share options exercised4  91 
Warrants exercised124  - 
Net cash provided by financing activities23  5,288 
    
(Decrease) increase in cash(2,876) 2,860 
Effects of exchange rate changes on cash(57) 59 
Cash, beginning of year4,368  1,449 
Cash, end of year1,435  4,368