Spectral AI Announces 2024 First Quarter Financial Results
Spectral AI, Inc. (Nasdaq: MDAI) announced their Q1 2024 financial results, showcasing a $6.3 million Research & Development revenue, cash reserves of $10.2 million, and the deployment of DeepView AI®-Burn devices in the UK with expected commercial revenue in 2H 2024. The company plans further regulatory submissions in the US and UK for the DeepView™ System in 2024 and 2025.
Research & Development Revenue increased to $6.3 million, reflecting a 24.6% rise from the previous year.
Gross Margin improved to 46.6% due to higher reimbursement rates under BARDA contracts.
Cash reserves increased to $10.2 million, showcasing a stronger financial position.
Enhanced access to capital through common stock purchase and fixed price standby equity agreements.
CEO Peter M. Carlson highlighted the strategic achievements and growth initiatives of the company.
Net loss for Q1 2024 was $(3.2) million, or $(0.19) per share, compared to $(3.6) million in the previous year.
General & administrative expenses remained flat at $5.1 million, potentially impacting profitability.
Expenses included borrowing costs and transaction costs related to financing agreements.
Further draws above advances in the fixed price standby equity agreement are at the sole discretion of the company.
Q1 Overview
- Research & Development Revenue of
$6.3 Million - Improved Capital Structure Reflected in Cash of
$10.2 Million - DeepView AI®-Burn Devices Deployed in UK; Expect Commercial Revenue in 2H 2024
- Additional Regulatory Submissions in US and UK for DeepView™ System Expected in 2024 and 2025
DALLAS, May 07, 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 first quarter ended March 31, 2024 (“Q1 2024”) and provided an update on its ongoing business activities.
“During the first quarter we continued to execute against our strategic priorities resulting in significant accomplishments across the enterprise,” said Peter M. Carlson, CEO of Spectral AI. “We made important strides towards generating our first commercial product revenue later this year with the deployment of our DeepView™ System for burn in the U.K. These initial installments enhance patient care and promote clinician familiarity with the device, while also providing real-world data. In the U.S., we advanced clinical studies designed to further demonstrate the efficacy of our DeepView™ System in providing a “Day One” healing assessment of burn wounds and diabetic foot ulcers (DFU). Additionally, we strengthened our management team and fortified the Company’s financial position to support our growth initiatives.”
Mr. Carlson concluded, “We remain driven by our steadfast belief that our proprietary, AI-Driven, DeepView™ System can help change the standard of care in wound assessment by providing predictive clinical insights that result in more effective and more efficient care across the healthcare ecosystem. We are on track to file additional US and UK regulatory submissions in 2024 and 2025 for the approval of our DeepView™ System, and expect to expand our commercial revenue platforms over the next two years.”
SELECT BUSINESS HIGHLIGHTS
Product Deployment in Support of UKCA Authorization
- Received UKCA Authorization to commence sales of our DeepView AI®– Burn in the UK in February 2024. In connection with this authorization, we have deployed devices at multiple facilities in the UK for evaluation. Additional deployments are planned through the summer.
Clinical Trials
- Enrolling patients in our DeepView AI®–Burn pivotal study at multiple burn centers and emergency departments across the US. The study is expected to enroll 240 patients, including both adult and pediatric subjects. This is expected to be our final clinical trial before seeking FDA approval in 2025.
- Completed enrollment in our DFU training study in the US with expected completion of our DFU validation study in 2H 2024.
- Completed a 76-patient enrollment for DFU for a clinical study titled, “Wound Assessment Using Spectral Imaging” that took place at The Royal College of Surgeons (RCSI) in Ireland’s Skin Wounds and Trauma (SWaT) Research Centre.
Corporate
- Welcomed Jeremiah Sparks as Chief Commercialization Officer. Mr. Sparks, an executive at AVITA Medical prior to joining Spectral AI, brings more than 20 years of medical device marketing and business strategy, including experience in launching new products both nationally and globally.
- Appointed Erich Spangenberg as Chief Executive Officer of the Company’s newly-formed health care IP-focused subsidiary, Spectral IP, and announced plans to explore the potential spin-off of this new subsidiary as an avenue to deliver additional value to Spectral AI shareholders. The Company also received a
$1.0 million investment from an affiliate of Mr. Spangenberg to fund acquisition opportunities.
Q1 2024 FINANCIAL RESULTS OVERVIEW
All comparisons are to the first quarter ended March 31, 2023 (“Q1 2023”) unless otherwise stated.
Research & Development Revenue 1
Research & Development Revenue for Q1 2024 rose
Gross Margin
Gross margin for Q1 2024 improved to
General & Administrative Expense
General & administrative expenses in Q1 2024 were flat at
Other Income (Expense)
Other expenses for Q1 2024 included borrowing related costs of
Net Loss
Net loss for Q1 2024 was
Financial Condition
As of March 31, 2024, cash improved to
As previously announced, the Company enhanced its access to capital by completing a common stock purchase agreement (“ELOC”) with an investment bank, under which the Company sold 1,187,398 shares, netting
Additionally, Spectral AI entered into a fixed price standby equity purchase agreement (“SEPA”) with a long-only investor that includes a
________________________
1Research and Development Revenue consisted primarily of funding from the Biomedical Advanced Research and Development Authority (BARDA), part of the Administration for Strategic Preparedness and Response (ASPR) within the U.S. Department of Health and Human Services.
2024 Guidance
The Company reiterates its revenue guidance of approximately
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 AI
Spectral 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 Statements
Certain 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. There can be no assurance that the contemplated transactions, spin out or dividend of shares will occur, or that any transaction, spin out or dividend will be successful; in addition, the Company has not yet determined what percentage of Spectral IP it will retain following completion of the proposed activities.
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 Director dsullivan@equityny.com | Conor Rodriguez Analyst crodriguez@equityny.com |
| Media: | |
| Russo Partners David Schull Russo Partners (858) 717-2310 david.schull@russopartnersllc.com | |
| Spectral AI, Inc. Condensed Consolidated Balance Sheets (in thousands, except share and per share data) | ||||||||
| March 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 10,157 | $ | 4,790 | ||||
| Accounts receivable, net | 1,828 | 2,346 | ||||||
| Inventory | 228 | 230 | ||||||
| Deferred offering costs | - | 283 | ||||||
| Prepaid expenses | 1,581 | 1,452 | ||||||
| Other current assets | 1,090 | 801 | ||||||
| Total current assets | 14,884 | 9,902 | ||||||
| Non-current assets: | ||||||||
| Property and equipment, net | 9 | 12 | ||||||
| Right-of-use assets | 590 | 778 | ||||||
| Total Assets | $ | 15,483 | $ | 10,692 | ||||
| Commitments and contingencies (Note 8) | ||||||||
| Liabilities and Stockholders’ Equity (Deficit) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 3,306 | $ | 2,683 | ||||
| Accrued expenses | 3,818 | 4,300 | ||||||
| Deferred revenue | 2,177 | 2,311 | ||||||
| Lease liabilities, short-term | 660 | 853 | ||||||
| Notes payable | 218 | 436 | ||||||
| Notes payable - at fair value | 4,534 | - | ||||||
| Notes payable - related party | 1,000 | - | ||||||
| Warrant liabilities | 1,798 | 1,818 | ||||||
| Total current liabilities | 17,511 | 12,401 | ||||||
| Total Liabilities | 17,511 | 12,401 | ||||||
| Stockholders’ Equity (Deficit) | ||||||||
| Preferred stock ( | - | - | ||||||
| Common stock ( | 2 | 2 | ||||||
| Additional paid-in capital | 33,953 | 31,065 | ||||||
| Accumulated other comprehensive income | 10 | 12 | ||||||
| Accumulated deficit | (35,993 | ) | (32,788 | ) | ||||
| Total Stockholders’ Equity (Deficit) | (2,028 | ) | (1,709 | ) | ||||
| Total Liabilities and Stockholders’ Equity (Deficit) | $ | 15,483 | $ | 10,692 | ||||
| Spectral AI, Inc. Condensed Consolidated Statements of Operations (in thousands, except share and per share data) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Research and development revenue | $ | 6,326 | $ | 5,078 | ||||
| Cost of revenue | (3,381 | ) | (2,897 | ) | ||||
| Gross profit | 2,945 | 2,181 | ||||||
| Operating costs and expenses: | ||||||||
| General and administrative | 5,088 | 5,079 | ||||||
| Total operating costs and expenses | 5,088 | 5,079 | ||||||
| Operating loss | (2,143 | ) | (2,898 | ) | ||||
| Other income (expense): | ||||||||
| Net interest income | 14 | 44 | ||||||
| Borrowing related costs | (276 | ) | - | |||||
| Change in fair value of warrant liability | 20 | 16 | ||||||
| Change in fair value of notes payable | 66 | - | ||||||
| Foreign exchange transaction gain (loss), net | (16 | ) | 13 | |||||
| Transaction costs | (701 | ) | (738 | ) | ||||
| Change in fair value of derivatives | (147 | ) | - | |||||
| Other expenses | - | - | ||||||
| Total other expense, net | (1,040 | ) | (665 | ) | ||||
| Loss before income taxes | (3,183 | ) | (3,563 | ) | ||||
| Income tax provision | (22 | ) | (46 | ) | ||||
| Net loss | $ | (3,205 | ) | $ | (3,609 | ) | ||
| Net loss per share of common stock | ||||||||
| Basic and Diluted | $ | (0.19 | ) | $ | (0.27 | ) | ||
| Weighted-average common shares outstanding | ||||||||
| Basic and Diluted | 16,560,298 | 13,190,600 | ||||||
| Other comprehensive income: | ||||||||
| Foreign currency translation adjustments | $ | (2 | ) | $ | 1 | |||
| Total comprehensive loss | $ | (3,207 | ) | $ | (3,608 | ) | ||
FAQ
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