TORONTO, March 7 /CNW/ - Spectral Diagnostics Inc. (TSX:SDI) today announced its operational highlights and financial results for the fiscal year ended December 31, 2007.
"Spectral's priority is the commercialization of its EAA(TM) Endotoxin Activity Assay, the only FDA cleared assay for the measurement of endotoxin. Endotoxemia is a systemic response to bacterial toxins that can rapidly lead to organ dysfunction, septic shock and ultimately death. Healthcare professionals have become much more aware of endotoxemia over the last several years, and many of the emerging therapies for sepsis now advancing though clinical trials target endotoxin," said Dr. Paul Walker, President and CEO of Spectral Diagnostics. "The growing awareness of endotoxemia, and the increasing number of therapies being developed for this indication, position us well to drive adoption of the EAA(TM), which can be used to identify patients, enable therapeutics and monitor treatment."
Highlights from 2007: - Entered into an exclusive agreement in November 2007 with Toray Medical Co. Ltd. to distribute Spectral's EAA(TM) Endotoxin Activity Assay in Japan. Toray Medical will market and sell the EAA(TM) in conjunction with its Toraymyxin blood purification device, which removes endotoxin from the bloodstream. Toray Medical will also distribute the EAA(TM) diagnostic as a stand-alone product. - Launched the EAA(TM) in Germany in September 2007 through A. Menarini Diagnostics Deutschland, building on a distribution agreement signed in May 2007 which covers Germany and includes an option to extend the arrangement to the rest of Europe. - Expanded its EAA(TM) product distribution agreement in Italy with its partner Estor, SpA in May 2007. The expanded agreement is aimed at increasing the number of hospitals in Italy utilizing the EAA(TM) assay, particularly in combination with the Toraymyxin blood purification device. - Entered into a non-exclusive license and material supply agreement in November 2007 with Bio-Rad Pasteur S.A., a leader in the manufacturing and distribution of products for the life science research and clinical diagnostics markets. Spectral will provide Bio-Rad with its proprietary single chain Troponin I reagents, which are now being sold by five major international reagent supply and instrumentation companies. - Upgraded manufacturing facilities to be self sufficient for the manufacture of its EAA(TM) product and its proprietary reagent products.
Financial Review
The financial statements apply to the year ended December 31, 2007 and the nine months ended December 31, 2006.
For the year ended December 31, 2007, the Company reported sales of $2,993,000 compared to $2,169,000 for the nine month period in 2006. Sales in 2007 were primarily comprised of the Company's EAA(TM) product and its Troponin I reagents. On an annualized basis there was a marginal increase in sales levels, however, three significant EAA(TM) distribution agreements were signed in the last half of 2007 that management anticipates will positively affect revenues going forward.
Operating expenses of $3,915,000 were closely managed in 2007 and remained consistent with spending levels for the nine months ended December 31, 2006, reflecting the Company's low cost operating structure.
The Company reported a Fiscal 2007 loss of $1,666,000 ($0.07 per share) compared to net income of $3,730,000 ($0.16 per share) for the nine months ended December 31, 2006. Net Income for the nine month period last year included a one time gain of $5,363,000 ($0.23 cents per share) on the settlement of certain convertible notes payable.
At December 31, 2007, the Company had cash and short-term investments totaling $4,927,000, compared to $6,002,000 as at December 31, 2006.
The total number of shares outstanding for the Company was 24,118,424 as at March 6, 2008.
Notice of Annual General Meeting
Spectral will hold its Annual General Meeting of Shareholders at 4:00 PM on May 13, 2008 at the offices of Stikeman, Elliott LLP, Suite 5300, 199 Bay Street, Toronto, Ontario.
About Spectral Diagnostics
Spectral is a developer of innovative technologies for comprehensive disease management. Spectral's lead product is its EAA(TM) Endotoxin Activity Assay, the only FDA approved diagnostic for the measurement of endotoxin. Spectral technologies provide accurate and timely information to clinicians enabling the early initiation of appropriate and targeted therapy. Spectral is listed on TSX under the symbol SDI.
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.
The TSX has not reviewed and does not accept responsibility for the
adequacy or accuracy of this statement.
Summary financial statements attached:
Spectral Diagnostics Inc.
Balance Sheets
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As at December 31, 2007 and 2006
(in thousands of dollars)
2007 2006
$ $
Assets
Current assets
Cash and cash equivalents 638 945
Short-term investments 4,289 5,057
Accounts receivable 677 762
Inventories 249 155
Prepaid expenses 55 130
-------------------------
5,908 7,049
Property, plant and equipment, net 379 235
Commercial instruments, net 164 29
Purchased technology and trademarks, net 1,529 2,022
-------------------------
7,980 9,335
-------------------------
-------------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 379 504
Deferred revenue 150 -
Convertible note payable 2,008 1,843
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2,537 2,347
-------------------------
Shareholders' Equity
Common shares 2,524 2,520
Other equity 5,606 5,489
Deficit (2,687) (1,021)
-------------------------
5,443 6,988
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7,980 9,335
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Spectral Diagnostics Inc.
Statements of Operations, Comprehensive (Loss) Income and Deficit
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(in thousands of dollars, except share and per share data)
Year Nine months
ended ended
December December
31, 2007 31, 2006
$ $
Sales 2,993 2,169
Cost of sales 803 583
-------------------------
Gross margin 2,190 1,586
-------------------------
Operating expenses
Selling, general and administrative 3,167 2,395
Amortization 588 580
Foreign exchange loss 102 34
Stock-based compensation 117 358
Research and product development,
net of tax credits (59) (239)
-------------------------
3,915 3,128
-------------------------
Loss before the following (1,725) (1,542)
Interest expense on convertible notes payable (165) (288)
Other net interest income 224 197
Gain on settlement of convertible
notes payable - 5,363
-------------------------
Net (loss) income and comprehensive (loss)
income for the period (1,666) 3,730
Deficit - Beginning of period (1,021) (103,671)
Restatement of capital - 98,920
-------------------------
Deficit - End of period (2,687) (1,021)
-------------------------
-------------------------
Basic (loss) earnings per common share (0.07) 0.16
-------------------------
-------------------------
Diluted (loss) earnings per common share (0.07) 0.14
-------------------------
-------------------------
Weighted average number of common
shares outstanding 24,117,333 22,874,694
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Spectral Diagnostics Inc.
Statements of Cash Flows
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(in thousands of dollars)
Year Nine months
ended ended
December December
31, 2007 31, 2006
$ $
Cash provided by (used in)
Operating activities
Net (loss) income and comprehensive (loss)
income for the period (1,666) 3,730
Items not affecting cash
Amortization 588 580
Amortization of commercial instruments
included in cost of sales 11 12
Loss on disposal of property, plant
and equipment 46 -
Write off of purchased technology
and trademarks 66 -
Stock-based compensation expense 117 358
Interest on convertible notes payable 165 288
Gain on settlement of convertible
notes payable - (5,363)
Changes in non-cash working capital (59) (664)
-------------------------
(732) (1,059)
-------------------------
Investing activities
Purchase of property, plant and equipment (280) (157)
Purchase of technology and trademarks (44) (22)
Purchase of commercial instruments (173) (113)
Decrease (increase) in short-term investments 768 (1,707)
Deferred revenue 150 -
-------------------------
421 (1,999)
-------------------------
Financing activities
Issuance of common shares 4 -
-------------------------
Decrease in cash and cash equivalents
during the period (307) (3,058)
Cash and cash equivalents
- Beginning of period 945 4,003
-------------------------
Cash and cash equivalents - End of period 638 945
-------------------------
-------------------------
Non-cash investing and financing activities
Settlement of existing convertible
notes payable - (9,801)
Issuance of new convertible note payable - 1,761
Issuance of common shares on settlement
of convertible notes payable - 1,994
Issuance of warrants on settlement
of convertible notes payable - 168
%SEDAR: 00002006E