Spectral Medical Inc. Closes C$6.1 Million Bought Deal Convertible Note Financing

Tigris patient enrollment momentum continues reaching 72

The Company anticipates three additional trial sites to be activated in Q3

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TORONTO, Sept. 07, 2023 (GLOBE NEWSWIRE) -- Spectral Medical Inc. (TSX: EDT) (“Spectral” or the “Company”) is pleased to announce that it has closed its previously announced ”bought deal” private placement of 9.0% convertible unsecured senior notes due November 1, 2026 (the “Notes") of the Company at a price of US$1,000 per Note (the “Issue Price”) for aggregate gross proceeds of US$4,553,000 (the "Offering"). The Offering was conducted by Paradigm Capital Inc. (the “Underwriter”) and consisted of the sale of 4,553 Notes at a price of US$1,000 per Note.

The Notes have a face value of US$1,000 per Note, bear interest of 9% and are due on November 1, 2026 (the “Maturity Date”). Holders of the Notes may convert all or any portion of the Notes into common shares of the Company (the “Common Shares”) in integral multiples of US$1,000 principal amount at any time prior to the Maturity Date. Each Note is convertible into approximately 15,475,647 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 last 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 Assay^TM (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 Underwriter received a cash commission of US$273,180 and 928,539 compensation options (the “Compensation Options”), with each Compensation Option entitling the holder thereof to acquire one Common Share at an exercise price equal to CDN$0.40 until the date that is three (3) years following today’s date.

The Company intends to use the net proceeds from the Offering for its Phase III registration trial (Tigris Study) for its PMX Product treatment for endotoxic septic shock and for general corporate and working capital purposes.

Chris Seto, Chief Executive Officer of Spectral Medical, stated, “We remain encouraged by the continued momentum and pace of patient enrollment in the Tigris study. We are now at 72 patients enrolled, and the study remains on track to reach the important interim milestone of 90 patients enrolled by the end of 2023. I would like to thank our strategic investors, Baxter and Pinnacle Island LP. Our investment partners understand and are aligned with the Company’s strategy, and I am pleased with their continued funding support to advance our pivotal Tigris trial.”