Spectral Medical Inc. Announces Proposed Public Offering of Units

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

TORONTO, May 27, 2020 (GLOBE NEWSWIRE) -- Spectral Medical Inc. (“Spectral” or the “Company”) (TSX: EDT), a late stage theranostic company advancing therapeutic options for sepsis and septic shock, announced today that it has filed a preliminary short form prospectus (the “Prospectus”) with the securities regulators in each of the provinces of Canada, except Québec (the “Jurisdictions”), in connection with a proposed marketed public offering of units of the Company (the “Offered Units”) at a price of $0.60 per Offered Unit (the “Offering Price”) for aggregate gross proceeds of up to $5 million (the “Offering”).

Each Offered Unit will consist of one common share of the Company (a “Common Share”) and one-half of one Common Share purchase warrant of the Company (each whole Common Share purchase warrant a “Warrant”), with each Warrant entitling the holder thereof to acquire one Common Share (a “Warrant Share”) at a price of $0.75 for a period of two years following the closing of the Offering.

The Offering will be conducted by Paradigm Capital Inc. (the “Agent”) on a “best efforts” agency basis. The Company has also agreed to grant the Agent an over-allotment option (the “Over-Allotment Option”) to offer for sale up to an additional number of Offered Units equal to 15% of the Offering, at the Offering Price, to cover over-allotments, if any, and for market stabilization purposes. The Over-Allotment Option will be exercisable in whole or in part, in the sole discretion of the Agent, at any time, and from time to time, for a period of 30 days from and including the closing date of the Offering and shall be exercisable for additional Offered Units, Warrants and/or Common Shares (or any combination thereof).

The Company intends to use the net proceeds of the Offering for its Phase III registration trial (TIGRIS) for its PMX treatment for endotoxemic septic shock, including data analysis and submission of documentation to the U.S. FDA, and for general corporate and working capital purposes.

The Offered Units will be offered for sale in the Jurisdictions pursuant to the Prospectus. The Offered Units may also be offered for sale in the United States on a private placement basis pursuant to exemptions from the registration requirements of the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) and applicable state securities laws, as well as other jurisdictions outside of Canada and the United States as the Company and Agent may agree, on an exempt basis in accordance with applicable securities laws.

The closing of the Offering is expected to occur on or about June 17, 2020 and is subject to certain customary conditions, including but not limited to, the entering into of an agency agreement between the Company and the Agent, and the receipt of all necessary approvals, including the approval of the Toronto Stock Exchange (the “TSX”) and the applicable securities regulatory authorities. The Prospectus contains important information relating to the Offering, is still subject to completion or amendment and there will not be any sale or any acceptance of an offer to buy the Offered Units until a receipt for the final short form prospectus relating to the Offering has been issued. A copy of the Prospectus is available under the Company’s profile on SEDAR at .

This press release does not constitute an offer to sell or a solicitation of an offer to buy the Offered Units in any jurisdiction, nor will there be any offer or sale of the Offered Units in any jurisdiction in which such offer, solicitation or sale would be unlawful. The Offered Units 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 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 200,000 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 330,000 patients are diagnosed with severe sepsis and septic shock in North America each year.

Spectral, through its wholly owned subsidiary, Dialco Medical Inc.(“Dialco”), is also commercializing a new proprietary platform, “SAMI”, targeting the renal replacement therapy (“RRT”) market. Dialco is also seeking regulatory approval for “DIMI” which is based on the same RRT platform, but will be intended for home hemodialysis use.

Spectral is listed on the Toronto Stock Exchange under the symbol EDT. For more information, please visit .

Forward-looking statement

Information in this news release that is not current or historical factual information may constitute forward-looking information or forward-looking statements within the meaning of securities laws and includes, without limitation, statements regarding the Offering generally, the anticipated use of proceeds and the receipt of requisite TSX and securities regulatory approvals. 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 and general economic, market and business conditions, including but not limited to the ongoing impact of COVID-19. Certain assumptions with respect to the Offering include those relating to the completion of the Offering in a timely manner and the ability to obtain all necessary regulatory approvals in connection with the Offering. Risks and other factors that could cause actual results or events to differ materially from current expectations with respect to the Offering include, but are not limited to, the risk of unforeseen delays in the completion of the Offering whether as a result of market conditions or otherwise, the failure of the Company to obtain the requisite regulatory approvals for the Offering and the inability of the Company to satisfy all conditions to the completion of the Offering (if at all). There can be no assurance that the Offering will be completed. 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 26, 2020, the Prospectus and other filings of Spectral with the securities regulatory authorities which are available at

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

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