Spectral Medical Inc.
TSX : EDT
OTCQX : EDTXF

Spectral Medical Inc.

November 13, 2015 09:23 ET

CORRECTION: Spectral Announces Third Quarter 2015 Results

TORONTO, ONTARIO--(Marketwired - Nov. 13, 2015) - This release corrects and replaces the release sent for Spectral Medical Inc. on November 13, 2015 at 8:00 AM ET. Spectral's financial tables have been appended to the end of the release.

Spectral Medical Inc., (TSX:EDT)(OTCQX:EDTXF), a Phase III company developing the first treatment for patients with septic shock that comprises a therapeutic device guided by a companion diagnostic, today announced its unaudited financial results for the third quarter ended September 30, 2015.

Financial Review

Revenue for the three months ended September 30, 2015 was $679,000 compared to $643,000 for the same period in the preceding year. For the nine months ended September 30, 2015 revenues were $2,374,000 compared to $2,265,000 in the first nine months of 2014. 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 September 30, 2015 amounted to $3,192,000 compared to $2,668,000 in 2014. Operating costs for the nine months ended were $9,566,000, representing a decrease of $364,000 from $9,930,000 for the first nine months of 2014. The year to date decrease is almost entirely attributable to lower costs for the EUPHRATES trial, resulting from fewer new sites being initiated into the trial and lower patient enrolment after the implementation of an additional exclusion criterion in April, 2014 that refined patient selection. The higher costs in the third quarter of 2015 were related to expenses incurred for the PMA submission and investigator meetings. Apart from clinical trial activities, the Company continues to maintain a low cost operating structure for its base business operations.

For the three months ended September 30, 2015, the Company reported a loss of $2,493,000 ($0.01 per share) compared to a loss of $ $1,403,000 ($0.01 per share) for the three months ended September 30, 2014. The loss for the nine months ended September 30, 2015 was $7,124,000 ($0.04 per share) compared to $7,029,000 ($0.05 per share) for the same nine month period in the prior year.

The Company concluded the third quarter of 2015 with cash and cash equivalents of $8,404,000 compared to $10,054,000 cash and cash equivalents on hand as of December 31, 2014.

The total number of shares outstanding for the Company was 190,686,405 as at September 30, 2015.

About Spectral

Spectral is a Phase III company seeking U.S. FDA approval for its lead theranostics product for the treatment of endotoxemic septic shock. Toraymyxin ™ (PMX) is a therapeutic hemoperfusion device that removes endotoxin, a main trigger of sepsis, from the bloodstream. Directed by the Company's Endotoxin Activity Assay (EAA™), the only FDA cleared diagnostic for the risk of developing sepsis, Spectral's EUPHRATES trial is the world's only active and most innovative Phase III study for a medical device in the area of septic shock.

PMX has been approved for therapeutic use in Japan and Europe, and has been used 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 septic shock in North America each year, representing a greater than $3 billion market opportunity for Spectral.

Spectral is listed on the Toronto Stock Exchange under the symbol EDT, and on the OTCQX under the symbol EDTXF. 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 Statements of Financial Position
(in thousands of Canadian dollars)
September 30 2015 December 31 2014
$ $
Unaudited Audited
Assets
Current assets
Cash and cash equivalents 8,404 10,054
Trade and other receivables 685 583
Inventories 255 166
Prepayments 245 185
9,589 10,988
Non-current assets
Property and equipment 613 490
Intangible asset 366 384
979 874
Total assets 10,568 11,862
Liabilities
Current liabilities
Trade and other payables 2,815 2,893
Deferred revenue 69 149
Total liabilities 2,884 3,042
Equity
Share capital 53,011 46,879
Contributed surplus 7,849 7,849
Other equity reserves 3,621 3,542
Deficit (56,797 ) (49,450 )
Total equity 7,684 8,820
Total liabilities and equity 10,568 11,862
Spectral Medical Inc.
Condensed Interim Statements of Loss and Comprehensive Loss
For the nine months ended September 30, 2015 and 2014
(Unaudited)
(in thousands of Canadian dollars, except for share and per share data)
Three months ended Nine months ended
September 30 September 30
2015 2014 2015 2014
$ $ $ $
Revenue 679 643 2,374 2,265
Expenses
Changes in inventories of finished goods and work- in-process 28 30 108 230
Raw materials and consumables used 133 104 340 315
Employee benefits 846 840 2,665 2,709
Consulting and professional fees 1,451 1,310 4,693 5,200
Product development 16 - 16 -
Regulatory and investor relations 197 51 505 185
Travel and entertainment 329 162 721 726
Depreciation and amortization 43 49 130 172
Foreign exchange loss (gain) 8 2 (5 ) 49
Other expenses 141 120 393 344
3,192 2,668 9,566 9,930
Operating loss (2,513 ) (2,025 ) (7,192 ) (7,665 )
Finance income 20 13 68 27
Loss and comprehensive loss before tax (2,493 ) (2,012 ) (7,124 ) (7,638 )
Deferred tax recovery - 609 - 609
Loss and comprehensive loss for the period (2,493 ) (1,403 ) (7,124 ) (7,029 )
Basic and diluted loss per common share (0.01 ) (0.01 ) (0.04 ) (0.05 )
Weighted average number of common shares outstanding 190,830,571 168,846,613 187,168,709 146,049,893
Spectral Medical Inc.
Condensed Interim Statements of Changes in Equity
For the nine months ended September 30, 2015 and 2014
(Unaudited)
(in thousands of Canadian dollars)
Issued capital Contributed surplus Share-based compensation Warrants Deficit Total Equity
Number $ $ $ $ $ $
Balance, January 1, 2014 134,462,561 33,957 3,864 3,239 4,594 (39,958 ) 5,696
Private placement 45,051,186 12,816 - - - - 12,816
Share options exercised 222,500 105 - (45 ) - - 60
Warrants exercised 994 1 - - - - 1
Warrants expiry, net of tax - - 3,985 - (4,594 ) - (609 )
Loss and comprehensive loss for the period - - - - - (7,029 ) (7,029 )
Share-based compensation - - - 295 - - 295
Balance, September 30, 2014 179,737,241 46,879 7,849 3,489 - (46,987 ) 11,230
Balance, January 1, 2015 179,737,241 46,879 7,849 3,542 - (49,450 ) 8,820
Private placement 11,049,464 6,021 - - - - 6,021
Shares repurchased under NCIB (480,000 ) (132 ) - - - (223 ) (355 )
Share options exercised 379,700 243 - (104 ) - - 139
Loss and comprehensive loss for the period - - - - - (7,124 ) (7,124 )
Share-based compensation - - - 183 - - 183
Balance, September 30, 2015 190,686,405 53,011 7,849 3,621 - (56,797 ) 7,684
Spectral Medical Inc.
Condensed Interim Statements of Cash Flows
For the nine months ended September 30, 2015 and 2014
(Unaudited)
(in thousands of Canadian dollars)
Nine months ended September 30
2015 2014
$ $
Cash flow provided by (used in)
Operating activities
Loss and comprehensive loss for the period (7,124 ) (7,029 )
Adjustments for:
Depreciation on property and equipment 112 154
Amortization of intangible asset 18 18
Share-based compensation 183 295
Deferred tax recovery - (609 )
Changes in items of working capital:
Trade and other receivables (102 ) (41 )
Inventories (89 ) 136
Prepayments (60 ) (100 )
Trade and other payables (78 ) (1,104 )
Deferred revenue (80 ) (79 )
Net cash used in operating activities (7,220 ) (8,359 )
Investing activities
Property and equipment expenditures (235 ) (47 )
Net cash used in investing activities (235 ) (47 )
Financing activities
Private placement 6,021 12,816
Share options exercised 139 60
Warrants exercised - 1
Shares repurchased under the NCIB (355 ) -
Net cash provided by financing activities 5,805 12,877
(Decrease)increase in cash and cash equivalents (1,650 ) 4,471
Cash and cash equivalents, beginning of period 10,054 7,229
Cash and cash equivalents, end of period 8,404 11,700

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