Spectral diagnostics completes conversion of promissory notes

Dec. 31, 2010 (Canada NewsWire Group) --

/NOT FOR DISSEMINATION IN THE UNITED STATES/

TORONTO, Dec. 31 /CNW/ - Spectral Diagnostics Inc. (TSX: SDI) ("Spectral", or the "Company") today announced that it has completed a transaction pursuant to which a principal amount of $1,343,750 non-interest bearing, unsecured convertible promissory notes of Spectral (the "Notes") held by three investors were converted into an aggregate of 4,648,512 common shares ("Common Shares") in the capital of Spectral at a conversion price of approximately $0.29 per Common Share, all in accordance with the terms of the Notes. Following the conversion, the Notes were cancelled.

About Spectral
Spectral is a Phase III company seeking U.S. FDA approval for its lead theranostics product for the treatment of severe sepsis and septic shock. Toraymyxin™ is a therapeutic hemoperfusion device that removes endotoxin, which can cause sepsis, from the bloodstream. Directed by the Company's Endotoxin Activity Assay (EAA™), the only FDA cleared diagnostic for the detection of endotoxin. Spectral's EUPHRATES trial is the world's first theranostics trial in the area of sepsis.

Toraymyxin™ has been approved for therapeutic use in Japan and Europe, and has been used safely and effectively in more than 70,000 patients to date. In March 2009, Spectral obtained the exclusive development and commercial rights in the U.S. for Toraymyxin™ and on November 22, 2010 Spectral obtained the exclusive distribution rights in Canada for Toraymyxin™. More than 250,000 patients are diagnosed with severe sepsis and septic shock each year in the U.S. alone, representing a greater than $1 billion market opportunity for Spectral.

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 them. While these assumptions were considered reasonable 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.