Spectral Announces Fourth Quarter and Fiscal 2017 Results

TORONTO, March 29, 2018 (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 financial results for the fourth quarter and for the year ended December 31, 2017.

Financial Review

Revenue for the three months ended December 31, 2017 was $918,000 compared to $806,000 for the same three-month period last year. Revenue for the year ended December 31, 2017 was $3,806,000 compared to $3,545,000 for the prior year, representing an increase of $261,000, or 7%.

For the quarter ended December 31, 2017, the Company reported operating costs of $1,960,000 compared to $1,842,000 for the corresponding period in 2016. Operating costs for the year ended December 31, 2017 amounted to $7,745,000 compared to $13,762,000 in 2016. 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, 2017 was $1,042,000 ($0.006 per share) compared to $1,024,000 ($0.005 per share) for the same quarter last year. For the year ended December 31, 2017, the Company reported a loss of $3,939,000, ($0.02 per share), compared to a loss of $10,149,000 ($0.05 per share), for the year ended December 31, 2016.

The Company concluded the 2017 year with cash of $1,449,000 compared to $5,080,000 cash on hand as of December 31, 2016.

The total number of common shares outstanding for the Company was 207,459,022 as at December 31, 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.

For further information please contact:

Dr. Paul Walker
President and CEO
Spectral Medical Inc.
416-626-3233 ext. 2100
pwalker@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 2017 December 31 2016
$ $
Assets
Current assets
Cash 1,449 5,080
Trade and other receivables 881 642
Inventories 191 244
Prepayments and other assets 73 166
2,594 6,132
Non-current assets
Property and equipment 570 634
Intangible asset 309 334
Total assets 3,473 7,100
Liabilities
Current liabilities
Trade and other payables 612 1,112
Deferred revenue 26 166
Total liabilities 638 1,278
Equity
Share capital 63,225 63,084
Contributed surplus 7,849 7,849
Share-based compensation 4,914 4,103
Warrants 132 132
Deficit (73,285) (69,346)
Total equity 2,835 5,822
Total liabilities and equity 3,473 7,100


Spectral Medical Inc.
Consolidated Statements of Loss and Comprehensive Loss
For the years ended December 31, 2017 and 2016
(in thousands of Canadian dollars, except for share and per share data)
2017 2016
$ $
Revenue 3,806 3,545
Expenses
Changes in inventories of finished goods and work-in-process 232 233
Inventory write-down 25 135
Raw materials and consumables used 245 473
Employee benefits 3,534 3,660
Consulting and professional fees 1,829 6,708
Product development 238 67
Regulatory and investor relations 479 866
Travel and entertainment 280 770
Depreciation and amortization 222 224
Foreign exchange loss 67 74
Other expenses 594 552
7,745 13,762
Operating loss (3,939) (10,217)
Finance income - 68
Loss and comprehensive loss for the year (3,939) (10,149)
Basic and diluted loss per common share (0.02) (0.05)
Weighted average number of common shares outstanding 207,329,193 204,679,282


Spectral Medical Inc.
Consolidated Statements of Changes in Equity
For the years ended December 31, 2017 and 2016
(in thousands of Canadian dollars)
Issued capital Contributed
surplus
Share-based
compensation
Warrants Deficit Total equity
Number$$$ $ $ $
Balance, January 1, 2016 190,771,40553,0587,8493,723 - (59,197)5,433
Bought deal prospectus offering 15,106,8049,163-- 236 - 9,399
Share options exercised 887,378479-(200)- - 279
Broker warrants exercised 400,000384-- (104)- 200
Loss and comprehensive loss for the year ---- - (10,149)(10,149)
Share-based compensation ---580 - - 580
Balance, December 31, 2016 207,165,58763,0847,8494,103 132 (69,346)5,822
Share options exercised 293,435141-(57)- - 84
Loss and comprehensive loss for the year ---- - (3,939)(3,939)
Share-based compensation ---868 - - 868
Balance, December 31, 2017 207,459,02263,2257,8494,914 132 (73,285)2,835



Spectral Medical Inc.
Consolidated Statements of Cash Flows
For the years ended December 31, 2017 and 2016
(in thousands of Canadian dollars)
2017 2016
$ $
Cash flow provided by (used in)
Operating activities
Loss and comprehensive loss for the year (3,939) (10,149)
Adjustments for:
Depreciation on property and equipment 197 199
Amortization of intangible asset 25 25
Share-based compensation 868 580
(Gain) loss on disposal of property and equipment (13) 6
Changes in items of working capital :
Trade and other receivables (239) (12)
Inventories 53 (1)
Prepayments and other assets 93 (25)
Trade and other payables (500) (1,738)
Deferred revenue (140) (10)
Net cash used in operating activities (3,595) (11,125)
Investing activities
Property and equipment expenditures (135) (122)
Proceeds on disposal of property and equipment 15 -
Net cash used in investing activities (120) (122)
Financing activities
Bought deal prospectus offering - 9,399
Share options exercised 84 279
Broker warrants exercised - 280
Net cash provided by financing activities 84 9,958
Decrease increase in cash (3,631) (1,289)
Cash, beginning of year 5,080 6,369
Cash, end of year 1,449 5,080

Source:Spectral Medical Inc.