Spectral Medical Inc.
TSX : EDT
OTCQX : EDTXF

Spectral Medical Inc.

August 14, 2015 08:00 ET

Spectral Announces Second Quarter 2015 Results

TORONTO, ONTARIO--(Marketwired - Aug. 14, 2015) - Spectral Medical Inc., (TSX:EDT) (OTCQX:EDTXQ), 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 second quarter ended June 30, 2015.

Financial Review

Revenue for the three months ended June 30, 2015 was $818,000 compared to $778,000 for the same period in the preceding year. For the six months ended June 30, 2015 revenues were $1,695,000 compared to $1,622,000 in the first half 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 June 30, 2015 amounted to $3,208,000 compared to $3,229,000 in 2014. Operating costs for the six months ended were $6,374,000, a decrease of $888,000 from $7,262,000 for the first six months of 2014. The 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. 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 June 30, 2015, the Company reported a loss of $2,366,000 ($0.01 per share) compared to a loss of $ $2,451,000 ($0.02 per share) for the three months ended June 30, 2014. The loss for the six months ended June 30, 2015 was $4,631,000 ($0.02 per share) compared to $5,626,000 ($0.04 per share) for the same six month period in the prior year.

The Company concluded the second quarter of 2015 with cash and cash equivalents of $10,936,000 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 191,052,655 as at June 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 100,000 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)
June 30 December 31
2015 2014
$ $
Unaudited Audited
Assets
Current assets
Cash and cash equivalents 10,936 10,054
Trade and other receivables 780 583
Inventories 267 166
Prepayments 320 185
12,303 10,988
Non-current assets
Property and equipment 606 490
Intangible asset 372 384
978 874
Total assets 13,281 11,862
Liabilities
Current liabilities
Trade and other payables 2,783 2.893
Deferred revenue 74 149
Total liabilities 2,857 3,042
Equity
Share capital 53,099 46,879
Contributed surplus 7,826 7,849
Other equity reserves 3,580 3,542
Deficit (54,081 ) (49,450 )
Total equity 10,424 8,820
Total liabilities and equity 13,281 11,862
Spectral Medical Inc.
Condensed Interim Statements of Loss and Comprehensive Loss
For the six months ended June 30, 2015 and 2014
(Unaudited)
(in thousands of Canadian dollars, except for share and per share data)
Three months ended Six months ended
June 30 June 30
2015 2014 2015 2014
$ $ $ $
Revenue 818 778 1,695 1,622
Expenses
Changes in inventories of finished goods and work- in-process
56

27

80

200
Raw materials and consumables used 107 134 207 211
Employee benefits 872 835 1,819 1,869
Consulting and professional fees 1,670 1,603 3,242 3,890
Regulatory and investor relations 138 58 308 134
Travel and entertainment 189 385 392 564
Depreciation and amortization 44 59 87 123
Foreign exchange loss (gain) 4 20 (13 ) 47
Other expenses 128 108 252 224
3,208 3,229 6,374 7,262
Operating loss (2,390 ) (2,451 ) (4,679 ) (5,640 )
Finance income 24 - 48 14
Loss and comprehensive loss for the period (2,366 ) (2,451 ) (4,631 ) (5,626 )
Basic and diluted loss per common share (0.01 ) (0.02 ) (0.02 ) (0.04 )
Weighted average number of common shares outstanding
190,803,548

134,462,639

185,307,431

134,462,611
Spectral Medical Inc.
Condensed Interim Statements of Changes in Equity
For the six months ended June 30, 2015 and 2014
(Unaudited)
(in thousands of Canadian dollars)
Contributed Share-based
Issued capital surplus 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
Warrants exercised 186 - - - - - -
Loss and comprehensive loss for the period
-

-

-

-

-

(5,626
)
(5,626
)
Share-based compensation - - - 257 - - 257
Balance, June 30, 2014 134,462,747 33,957 3,864 3.496 4,594 (45,584 ) 327
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 the normal course issuer bid
(90,000
)
(32
)
(23
)
-

-

-

(55
)
Share options exercised 355,950 231 - (99 ) - - 132
Loss and comprehensive loss for the period
-

-

-

-

-

(4,631
)
(4,631
)
Share-based compensation - - - 137 - - 137
Balance, June 30, 2015 191,052,655 53,099 7,826 3,580 - (54,081 ) 10,424
Spectral Medical Inc.
Condensed Interim Statements of Cash Flows
For the six months ended June 30, 2015 and 2014
(Unaudited)
(in thousands of Canadian dollars)
Six months ended
2015 2014
$ $
Cash flow provided by (used in)
Operating activities
Loss and comprehensive loss for the period (4,631 ) (5,626 )
Adjustments for:
Depreciation on property and equipment 75 111
Amortization of intangible asset 12 12
Share-based compensation 137 257
Changes in items of working capital:
Trade and other receivables (197 ) (78 )
Inventories (101 ) 133
Prepayments (135 ) (160 )
Trade and other payables (110 ) (400 )
Deferred revenue (75 ) (23 )
Net cash used in operating activities (5,025 ) (5,774 )
Investing activities
Property and equipment expenditures (191 ) (14 )
Net cash used in investing activities (191 ) (14 )
Financing activities
Private placement 6,021 -
Share options exercised 132 -
Shares repurchased under the NCIB (55 ) -
Net cash provided by financing activities 6,098 -
Increase (decrease) in cash and cash equivalents 882 (5,788 )
Cash and cash equivalents, beginning of period 10,054 7,229
Cash and cash equivalents, end of period 10,936 1,441

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