Nasdaq

Spectral Announces Fourth Quarter and Fiscal 2018 Results

28-03-2019

TORONTO, March 28, 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 financial results for the fourth quarter and for the year ended December 31, 2018.

Financial Review

Revenue for the three months ended December 31, 2018 was $1,864,000 compared to $884,000 for the same three-month period last year. Revenue for the year ended December 31, 2018 was $3,840,000 compared to $3,669,000 for the prior year, representing an increase of $171,000, or 5%.

For the quarter ended December 31, 2018, the Company reported operating costs of $1,420,000 compared to $1,960,000 for the corresponding period in 2017. Operating costs for the year ended December 31, 2018 amounted to $6,329,000 compared to $7,745,000 in 2017. 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.

Income for the quarter ended December 31, 2018 was $444,000 ($0.002 per share) compared to a loss of $1,076,000 ($0.005 per share) for the same quarter last year. For the year ended December 31, 2018, the Company reported a loss of $2,489,000, ($0.01 per share), compared to a loss of $4,076,000 ($0.02 per share), for the year ended December 31, 2017.

The Company concluded the 2018 year with cash of $4,368,000 compared to $1,449,000 cash on hand as of December 31, 2017.

The total number of common shares outstanding for the Company was 225,591,183 as at December 31, 2018.

Corporate update

  • Tigris protocol approved by the U.S. Food and Drug Administration and the study is to commence in the first half of 2019.
  • The first order of Spectral continuous renal replacement therapy (“CRRT”) machines (“SAMI”) was received and delivered in the first quarter of 2019.
  • Enhancement of Spectral’s renal replacement therapy program to include home hemodialysis.

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 Ali Mahdavi
President and CEO Capital Markets & Investor Relations
Spectral Medical Inc. 416-962-3300
416-626-3233 ext. 2100 am@spinnakercmi.com 
pwalker@spectraldx.com   

Consolidated Statements of Financial Position

(in thousands of Canadian dollars)

  December 31
2018
    December 31
2017
    January 01
2017
 
        Restated (Note 4)     Restated (Note 4)  
  $     $     $  
           
Assets          
Current assets          
Cash 4,368     1,449     5,080  
Trade and other receivables 1,433     881     642  
Inventories 197     191     244  
Prepayments and other assets 192     73     166  
Contract asset 126     -     -  
  6,316     2,594     6,132  
Non-current assets          
Property and equipment 377     570     634  
Intangible asset 284     309     334  
           
Total assets 6,977     3,473     7,100  
           
Liabilities          
Current liabilities          
Trade and other payables 500     612     1,112  
Contract liabilities 107     3     6  
Total liabilities 607     615     1,118  
           
Equity          
Share capital 66,646     63,225     63,084  
Contributed surplus 7,981     7,849     7,849  
Share-based compensation 5,564     4,914     4,103  
Warrants 1,930     132     132  
Deficit (75,751 )   (73,262 )   (69,186 )
Total equity 6,370     2,858     5,982  
           
Total liabilities and equity 6,977     3,473     7,100  
 

Consolidated Statements of Loss and Comprehensive Loss
For the years ended December 31, 2018 and 2017

(in thousands of Canadian dollars, except for share and per share data)

  2018     2017  
      Restated  
      (Note 4)  
  $      $  
       
Revenue 3,840     3,669  
       
Expenses      
Changes in inventories of finished goods and work-in-process 102     232  
Inventory write-down 229     25  
Raw materials and consumables used 266     245  
Salaries and benefits 3,095     3,534  
Consulting and professional fees 1,198     1,829  
Product development 110     238  
Regulatory and investor relations 461     479  
Travel and entertainment 129     280  
Depreciation and amortization 230     222  
Foreign exchange (gain) loss (74 )   67  
Other expenses 583     594  
  6,329     7,745  
       
Loss and comprehensive loss for the year (2,489 )   (4,076 )
       
Basic and diluted loss per common share (0.01 )   (0.02 )
       
Weighted average number of common shares outstanding      
220,172,675   207,329,193  


Consolidated Statements of Changes in Equity

For the years ended December 31, 2018 and 2017

(in thousands of Canadian dollars)

           
  Issued capital Contributed
surplus
 

Share-based
compensation

Warrants Deficit   Total equity  
  Number $ $ $ $ $   $  
Balance, January 1, 2017 207,165,587 63,084 7,849 4,103   132   (69,346 ) 5,822  
Change in accounting policies - - - -   -   160   160  
Restated equity, January 1, 2017 207,165,587 63,084 7,849 4,103   132   (69,186 ) 5,982  
Share options exercised 293,435 141 - (57 ) -   -   84  
Loss and comprehensive loss  for the year, restated - - - -   -   (4,076 ) (4,076 )
Share-based compensation - - - 868   -   -   868  
Balance, December 31, 2017 207,459,022 63,225 7,849 4,914   132   (73,262 ) 2,858  
Private placement 17,694,661 3,267 - -   1,930   -   5,197  
Share options exercised 437,500 154 - (63 ) -   -   91  
Warrant expiry - - 132 -   (132 ) -   -  
Loss and comprehensive loss for the year - - - -   -   (2,489 ) (2,489 )
Share-based compensation - - - 713   -   -   713  
Balance, December 31, 2018 225,591,183 66,646 7,981 5,564   1,930   (75,751 ) 6,370  
                       

 

Spectral Medical Inc.
Consolidated Statements of Cash Flows
For the years ended December 31, 2018 and 2017

(in thousands of Canadian dollars)

  2018     2017  
      Restated  
      (Note 4)  
  $     $  
Cash flow provided by (used in)      
       
Operating activities      
Loss and comprehensive loss for the year (2,489 )   (4,076 )
Adjustments for:      
Depreciation on property and equipment 205     197  
Amortization of intangible asset 25     25  
Share-based compensation 713     868  
Write down of property and equipment 35      
Gain on disposal of property and equipment -     (13 )
Changes in items of working capital :      
Trade and other  receivables (552 )   (239 )
Inventories (6 )   53  
Prepayments and other assets (119 )   93  
Contract asset (126 )    
Trade and other payables (112 )   (500 )
Contract liability 104     (3 )
Net cash used in operating activities (2,322 )   (3,595 )
       
Investing activities      
Property and equipment expenditures (47 )   (135 )
Proceeds on disposal of property and equipment -     15  
Net cash used in investing activities (47 )   (120 )
       
Financing activities      
Proceeds from private placement 5,308     -  
Transaction costs paid (111 )   -  
Share options exercised 91     84  
Net cash provided by financing activities 5,288     84  
       
Increase (decrease) in cash 2,919     (3,631 )
       
Cash, beginning of year 1,449     5,080  
Cash, end of year 4,368     1,449