Spectral Medical Inc. Announces Unit Public Offering and Private Bond Proposal, The Canadian Business Journal

Not intended for distribution to US Newswire services or for distribution within the US

TORONTO, October 5, 2022 (GLOBE NEWSWIRE) — Spectral Medical Inc. (TSX: EDT) (“spectrum” or “Company”) is pleased to announce the opening of the unit’s prospectus proposal (“unit offering) company (“unit”) and private placements (“Notes Offering” and collectively with the Unit Offerings, “Recruitment”) Convertible Senior Bonds (“Note”) At least $8.5 million Canadian dollars. Recruitment is Paradigm Capital Inc.paradigm” or “Agent”) on a “best effort” agency basis.

Each unit consists of one share of our common stock (“common stock) and one-half of a warrant to purchase one share of our common stock (an all share purchase warrant for each common share, “warrant”), each warrant entitles its holder to acquire one share of common stock for a period of 36 months after the offering ends.

The bond has a face value of US$1,000, an interest rate of 7% and a maturity date of 2026 (“maturity date”). Holders of the Notes may convert all or part of the Notes in whole multiples of the principal amount of US$1,000 at any time prior to the Maturity Date. The Notes are convertible into common stock of the Company at a conversion price equal to 30% of the price allotted to the underlying common stock of the Units, subject to customary anti-dilution adjustments.

The Company intends to complete a portion of the bond offering with its existing strategic commercial partners and potentially Pinnacle Island LP following the strategic commercial partners’ agreement to purchase the US$2.5 million bond . Closing of the note offering is subject to the closing of the unit offering, execution of the securities purchase agreement and other customary closing conditions for such transactions.

The Company has also agreed to grant the Agent an over-allotment option (“Over-allotment option”) to sell an additional number of units equal to 15% of the offering, to cover any over-allotment, and to stabilize the market. The Over-Allotment Option may be exercised in whole or in part at any time, at Agent’s sole discretion, during his thirty (30) days, including the closing date of the Offering. Exercisable for additional units, warrants, notes and/or common stock (or any combination thereof).

The Company will use net proceeds from the offering for a Phase 3 registrational trial (Tigris) for the treatment of PMX (defined below) in endotoxemic septic shock, and for general corporate and working capital purposes intend to do something.

The offering of the unit is subject to a preliminary simplified prospectus (“prospectus”) Canadian provinces other than Quebec (collectively, “jurisdiction”). The Company and Agents are expected to enter into formal agency agreements with respect to Offerings. Units may also be offered in the United States on a private placement basis (i) subject to applicable exemptions from the registration requirements of the United States Securities Act of 1933, as amended (“U.S. Securities Law) and applicable U.S. state securities laws; and (ii) outside of Canada and the United States, standards that do not require certification or registration of our securities under domestic or foreign securities laws.

Notes are provided on a “best effort” private placement basis. Prospectus exemption in all Canadian provinces and territories. (ii) to U.S. “accredited investors” pursuant to U.S. securities laws and applicable exemptions from registration requirements under applicable U.S. state securities laws; (iii) jurisdictions other than Canada and the United States, as mutually agreed between Agent and Us;

Closing of the offering will take place on the Toronto Stock Exchange (“TSX”) the applicable securities regulator. The prospectus contains important information regarding the unit offering and may still be completed or amended and pending the issuance of a definitive short-form prospectus receipt for the unit offering. No acceptance of offers to sell or buy. issued. A copy of the prospectus is available from his SEDAR company profile at www.sedar.com.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any Units and/or Notes in any jurisdiction and no offer or sale of any Units and/or Notes will be made in any jurisdiction. . Any such offer, solicitation or sale is illegal. The Units and Notes are not and will not be registered under the U.S. Securities Act or the U.S. State Securities Laws and will not be registered in the U.S. except pursuant to any applicable exemption from the U.S. Securities Law registration requirements. It is never offered or sold. Applicable State Securities Laws.

Dialco Update

The Company also has a wholly-owned subsidiary, Dialco Medical Inc. (“Dialco”). Dialco has extended his DIMI license agreement with Infomed SA until his November 30th, 2022. This is for the parties to evaluate strategic options for advancing his DIMI to commercialization through trials.

About Spectral

Spectral is a Phase 3 company seeking US FDA approval for its proprietary product, Toraymyxin™ (“PMX”), for the treatment of patients with septic shock. PMX is a therapeutic hemoperfusion device that removes sepsis-causing endotoxins from the bloodstream and is based on the company’s Endotoxin Activity Assay (EAA™), the only FDA-approved diagnostic method for diagnosing the risk of developing sepsis. increase.

PMX is approved for therapeutic use in Japan and Europe and has been used safely and effectively in more than 340,000 patients to date. Spectral acquired the exclusive development and commercial rights to his PMX in the United States in March 2009 and entered into an exclusive distribution agreement for the product in Canada in November 2010. In July 2022, the US FDA granted Breakthrough Device designation to his PMX for the treatment of endotoxemia septic shock. Approximately 330,000 patients are diagnosed with septic shock each year in North America.

Through its wholly owned subsidiary, Dialco Medical Inc., Spectral is also commercializing a new suite of proprietary platforms for renal replacement therapy (RRT) across the dialysis spectrum. SAMI targets the acute RRT market, while DIMI targets the chronic RRT market. Dialco is currently seeking regulatory approval for in-home use in the US for DIMI, which is based on his RRT platform, the same as SAMI, but intended for use in home hemodialysis. DIMI recently received FDA 510k clearance for use in hospital and clinical settings and is licensed by Health Canada for use in Canadian hospitals, clinics and homes.

Spectral is listed on the TSX under the symbol EDT. For more information, please visit www.spectraldx.com.

Forward-Looking Statements

Information in this news release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Implied in this information, particularly with respect to his Spectral’s future prospects and anticipated events or results, are the beliefs and assumptions of Spectral’s senior management based on currently available information. These assumptions were considered reasonable by Spectral at the time of preparation, but may prove to be incorrect. Readers are advised that actual results may be subject to a number of risks, including the availability of funds and resources to pursue research and development projects, the successful and timely completion of clinical trials, and Spectral’s ability to take advantage of business opportunities in biomedical sciences. and uncertainty. The industry, the granting of necessary regulatory approvals and general economic, market and business conditions could differ materially from those currently anticipated.

Risks and other factors that could cause actual results or events with respect to the Offering to differ materially from current expectations include the risk of unexpected delays in completing the Offering as a result of market conditions or otherwise; is not limited to , the Company’s failure to obtain the required regulatory approvals for the Offering and the Company’s failure, if any, to meet all the conditions leading up to the completion of the Offering; There is no guarantee that the offering will be completed. Actual results may differ materially from those currently anticipated. Readers are cautioned not to place undue reliance on these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, except as required by law. The potential impact on the Company as further described in Spectral’s Annual Information Form dated March 23, 2022, the prospectus and Spectral’s other filings with securities regulators available at www.sedar. Other potential risks and uncertainties are also mentioned. .com.

TSX has not verified and is not responsible for the validity or accuracy of this statement.

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