Spectral AI Announces 2024 Third Quarter Financial Results
Revenue Rose to $8.2 MillionCompany Reaffirms Timeline for Regulatory Submission to U.S. FDA
Q3 2024 Overview
Research & Development Revenue Rose 138% to $8.2 Million
Last Patient Out at Burn Centers for U.S. Burn Pivotal Study; Top Line Study Results Expected in Q4 2024
U.S. FDA Submission on Track for Q2 2025
Completed Proof-of-Concept Module for Wound Measurement Technology
DALLAS, Nov. 06, 2024 (GLOBE NEWSWIRE) -- Spectral AI, Inc. (NASDAQ:MDAI) ("Spectral AI" or the "Company"), an artificial intelligence (AI) company focused on medical diagnostics for faster and more accurate treatment decisions in wound care, today announced financial results for the third quarter ended September 30, 2024 ("Q3 2024") and provided an update on ongoing activities to commercialize its proprietary, AI-driven DeepView® System for burn indication ("DeepView AI®-Burn").
Dr. J. Michael DiMaio, the Company's Founder and recently appointed Chairman of the Board of Directors, said, "My confidence in the potential of DeepView AI®-Burn to change the standard of care in burn wound assessment and improve patient outcomes has never been greater. We achieved a critical clinical milestone with the announcement of last patient out at our U.S. Burn Pivotal Study and remain on schedule for our De Novo submission to the U.S. Food and Drug Administration ("FDA") in the second quarter of 2025 for the use of DeepView AI®-Burn in burn centers. We are prioritizing our regulatory pathways for burn, fortifying our long-standing relationships with U.S. Government agencies, developing strategic partnerships that can expand our global reach, and capitalizing on the platform nature of our proprietary technology to pursue additional pipeline applications. We are fortunate to have the support of a team of dedicated professionals, an engaged and committed management team and Board, and $150 million of non-dilutive U.S. Government funding to advance our technology towards commercialization. We look forward to our future with great confidence."
DeepView AI®-Burn Highlights
Final group of burn center patients in U.S. Burn Pivotal Study completed clinical visits, with top line study results expected in December 2024.
Received a new award of over $850,000 from the Medical Technology Enterprise Consortium ("MTEC") to support the ongoing development of DeepView SnapShot® M, the Company's handheld predictive burn wound healing device targeted for use in battlefield assessment. Total non-dilutive U.S. Government funding for DeepView SnapShot® M now exceeds $7.0 million.
Completion of a proof-of-concept module for the Company's wound measurement technology that calculates the total body surface area ("TBSA") of a burn. This technology provides an accurate, and standardized measurement that the Company believes is a significant improvement over current wound size measurement technology and can improve patient treatment decisions.
Upcoming Milestones
Top line results from U.S. Burn Pivotal Study Expected Q4 2024
U.S. FDA submission for the use of DeepView AI®-Burn in burn centers in Q2 2025
Plan to Spin-Off Spectral IP Subsidiary
On November 6, 2024, the Company announced its intent to spin-off its Spectral IP, Inc. subsidiary ("Spectral IP") to continue to seek ways to maximize shareholder value. The Company anticipates that the transaction will be in the form of a stock distribution to its shareholders of Spectral IP, which will become a new, independent publicly-traded company.
Q3 2024 FINANCIAL RESULTS OVERVIEWAll comparisons are to the third quarter ended September 30, 2023 ("Q3 2023") unless otherwise stated.
Research and Development Revenue1Research & Development Revenue for Q3 2024 rose 138% to $8.2 million from $3.4 million, primarily reflecting an increased level of work on the Company's Project BioShield (PBS) contract with BARDA, and awards and work performed on other U.S. Government contracts.
Gross Margin Gross margin for Q3 2024 improved to 44.9% from 42.8%, reflecting increased development activity and higher Research and Development revenue.
General & Administrative ExpenseGeneral & administrative expenses in Q3 2024 declined to $4.6 million, or 55.7% of revenue, from $5.6 million, or 163.9% of revenue. This was driven primarily by an approximately $1.0 million reduction in non-revenue generating research and development activities associated with the Company's strategic shift to a larger focus on advancing the BARDA PBS contract.
Operating LossOperating loss narrowed to $(0.9) million from $(4.2) million, reflecting higher Research and Development revenue, improved gross margin, and reduced operating costs.
Net LossNet loss for Q3 2024 was $(1.5) million, or $(0.08) per share, compared to a net loss of $(10.6) million, or $(0.77) per share. Net loss in Q3 2024 included $1.1 million in borrowing related costs as compared to no such costs in the prior year period. Net loss in Q3 2023 included, among other items, $7.6 million in non-recurring transaction costs associated with the September 2023 consummation of the Company's business combination and Nasdaq listing.
Adjusted EBITDA Adjusted EBITDA loss for Q3 2024 was $(0.7) million compared to a loss of $(3.9) million.
Financial Condition As of September 30, 2024, the Company had $3.7 million in cash, short-term notes payable of $5.0 million, and $1.0 million of long-term debt relating to Spectral IP. Cash at September 30, 2024 included $0.9 million in Spectral IP.
2024 Guidance The Company reiterates its revenue guidance of approximately $28.0 million for FY 2024.
CONFERENCE CALL
The Company will host a conference call today at 5:00 pm Eastern Time to discuss these results.
Investors interested in participating in the live call can dial:
833-630-1956, U.S.
412-317-1837, International
A simultaneous webcast of the call may be accessed online from the Events & Presentations section of the Investor Relations page of the Company's website at https://investors.spectral-ai.com/news-events/events.
About Spectral AISpectral AI, Inc. is a Dallas-based predictive AI company focused on medical diagnostics for faster and more accurate treatment decisions in wound care, with initial applications involving patients with burns and diabetic foot ulcers. The Company is working to revolutionize the management of wound care by "Seeing the Unknown®" with its DeepView® System. DeepView is a predictive device that offers clinicians an objective and immediate assessment of a wound's healing potential prior to treatment or other medical intervention. With algorithm-driven results and a goal of exceeding the current standard of care in the future, DeepView is expected to provide faster and more accurate treatment insight towards value care by improving patient outcomes and reducing healthcare costs. For more information about DeepView, visit www.spectral-ai.com.
Forward-Looking StatementsCertain statements made in this release are "forward looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995, including statements regarding the Company's strategy, plans, objectives, initiatives and financial outlook. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should," "future," "propose" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements.
These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside Company's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. As such, readers are cautioned not to place undue reliance on any forward-looking statements.
Investors should carefully consider the foregoing factors and the other risks and uncertainties described in the "Risk Factors" sections of the Company's filings with the SEC, including the Registration Statement and the other documents filed by the Company. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements.
Investors:
The Equity Group Devin Sullivan Managing
Conor
Spectral AI, Inc.Unaudited Condensed Consolidated Balance Sheets(in thousands, except share and per share data)
September 30,
December 31,
2024
2023
Assets
Current assets:
Cash
$
3,702
$
4,790
Accounts receivable, net
2,834
2,346
Inventory
443
230
Deferred offering costs
-
283
Prepaid expenses
1,506
1,452
Other current assets
1,011
801
Total current assets
9,496
9,902
Non-current assets:
Property and equipment, net
5
12
Right-of-use assets
2,101
778
Total Assets
$
11,602
$
10,692
Commitments and contingencies (Note 8)
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable
$
2,797
$
2,683
Accrued expenses
3,253
4,300
Deferred revenue
731
2,311
Lease liabilities, short-term
212
853
Notes payable
597
436
Notes payable - at fair value
4,377
-
Warrant liabilities
1,101
1,818
Total current liabilities
13,068
12,401
Notes payable - related party
1,000
-
Lease liabilities, long-term
1,870
-
Total Liabilities
15,938
12,401
Stockholders' Deficit
Preferred stock ($0.0001 par value); 1,000,000 shares authorized; no shares issued and outstanding as of September 30, 2024 and December 31, 2023
-
-
Common stock ($0.0001 par value); 80,000,000 shares authorized; 18,513,073 and 16,294,935 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively
2
2
Additional paid-in capital
35,998
31,065
Accumulated other comprehensive income
25
12
Accumulated deficit
(40,361
)
(32,788
)
Total Stockholders' Deficit
(4,336
)
(1,709
)
Total Liabilities and Stockholders' Deficit
$
11,602
$
10,692
The accompanying notes are an integral part of these condensed consolidated financial statements
Spectral AI, Inc. Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss(in thousands, except share and per ...
