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Classified in: Health, Science and technology, Business
Subject: FINANCING AGREEMENTS

Spectral Medical Inc. Closes $10.8 Million Public Offering and Concurrent Private Placement


NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

TORONTO, Nov. 02, 2022 (GLOBE NEWSWIRE) -- Spectral Medical Inc. (TSX: EDT) ("Spectral" or the "Company") is pleased to announce that it has closed its previously announced prospectus offering of units (the "Units") of the Company (the "Unit Offering") and concurrent private placement (the "Note Offering" and together with the Unit Offering, the "Offering") of US$5 million of convertible senior notes (the "Notes"). Aggregate gross proceeds raised pursuant to the Offering were approximately C$10.8 million. The Offering was conducted by Paradigm Capital Inc. (the "Agent") and consisted of the sale of 10,061,250 Units at a price of C$0.40 per Unit and 5,000 Notes at a price of US$1,000 per Note. Each Unit consisted of one common share of the Company (a "Common Share") and one-half (½) of one Common Share purchase warrant of the Company (each whole warrant, a "Warrant"), with each Warrant entitling the holder thereof to acquire one Common Share at a price of C$0.48 for a period of 36 months following today's date.

The Notes have a face value of US$1,000 per Note, bear interest of 7% and are due on November 1, 2026 (the "Maturity Date"). Holders of the Notes may convert all or any portion of the Notes in integral multiples of US$1,000 principal amount at any time prior to the Maturity Date. Each Note is convertible into approximately 2,828 Common Shares, subject to customary anti-dilution and make-whole fundamental change adjustments. Pursuant to the Note Offering, Baxter International Inc. (NYSE: BAX) ("Baxter") agreed to purchase certain of the Notes in connection with an amendment to a portion of the initial milestone payment due to the Company under the Distribution Agreement (as defined below). In 2020, Baxter, a leading global medical products company, entered into a distribution agreement (the "Distribution Agreement") with the Company for PMX (as defined below) and the Endotoxin Activity Assaytm (EAA), an on-market companion diagnostic tool that aids in the risk assessment of ICU patients for progression to severe sepsis.

In connection with the Offering, the Agent received a cash commission of C$650,940 and 989,850 Common Share purchase warrants (the "Compensation Warrants"), with each Compensation Warrant entitling the Agent to acquire one Common Share at a price of C$0.40 for a period of 36 months from today's date.

The Company intends to use the net proceeds from the Offering for its Phase III registration trial (Tigris) for its PMX (as defined below) treatment for endotoxemic septic shock and for general corporate and working capital purposes, as more fully described in the short-form prospectus (the "Prospectus") of the Company dated October 28, 2022.

The securities issued pursuant to the Unit Offering were qualified for distribution pursuant to the Prospectus, filed in each of the provinces and territories of Canada other than Québec, and offered and sold elsewhere outside of Canada on a private placement basis. The Prospectus and the documents incorporated by reference therein, are available on the Company's issuer profile on SEDAR at www.sedar.com.

The securities issued in connection with the Note Offering are subject to a statutory hold period expiring on March 3, 2023, in accordance with applicable Canadian securities laws.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the Units and/or the Notes in any jurisdiction, nor will there be any offer or sale of the Units and/or the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful. The Units and the Notes have not and will not be registered under the U.S. Securities Act or any U.S. state securities laws, and therefore will not be offered or sold within the United States except pursuant to applicable exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws.

About Spectral

Spectral is a Phase 3 company seeking U.S. FDA approval for its unique product for the treatment of patients with septic shock, Toraymyxintm ("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 (EAAtm), the only FDA cleared diagnostic for the risk of developing sepsis.

PMX is approved for therapeutic use in Japan and Europe, and has been used safely and effectively on more than 340,000 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. In July 2022, the U.S. FDA granted Breakthrough Device Designation for PMX for the treatment of endotoxemic septic shock. Approximately 330,000 patients are diagnosed with septic shock in North America each year.

Spectral, through its wholly owned subsidiary, Dialco Medical Inc., is also commercializing a new set of proprietary platforms addressing renal replacement therapy (RRT) across the dialysis spectrum. SAMI is targeting the acute RRT market, while DIMI is targeting the chronic RRT market. Dialco is currently pursuing regulatory approval for U.S. in-home use of DIMI, which is based on the same RRT platform as SAMI, but will be intended for home hemodialysis use. DIMI recently received its FDA 510k clearance for use in hospital and clinical settings, and obtained its Health Canada license for use within Canadian hospitals, clinics and in home.

Spectral is listed on the TSX 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.

Actual results could differ materially from what is currently expected, and readers are cautioned not to place undue reliance on these forward-looking statements. Except as required by law, the Company disclaims any obligation to update or revise any forward-looking statements. Reference is also made to the other risks and uncertainties that may affect the Company which are more fully described in Spectral's Annual Information Form dated March 23, 2022, the Prospectus and other filings of Spectral with the securities regulatory authorities which are available at www.sedar.com.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this statement

For further information, please contact:

Blair McInnis
CFO
Spectral Medical Inc.
416-626-3233
bmcinnis@spectraldx.com 
Ali Mahdavi
Capital Markets & Investor Relations
Spinnaker Capital Markets Inc.
416-962-3300
am@spinnakercmi.com 
David Waldman/Natalya Rudman
US Investor Relations
Crescendo Communications, LLC
212-671-1020
edt@crescendo-ir.com 


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News published on 2 november 2022 at 09:30 and distributed by: