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Spectral announces second quarter 2009 results
Date:8/13/2009

TORONTO, Aug. 13 /PRNewswire-FirstCall/ - Spectral Diagnostics Inc., (TSX: SDI), a company focused on bringing to market a diagnostic and a therapeutic targeting severe sepsis, today announced its financial results for the second quarter ended June 30, 2009.

"During the quarter, results of the EUPHAS trial in Italy were published in the Journal of American Medical Association (JAMA). The findings showed that the Toraymyxin(TM) cartridge significantly reduced mortality from sepsis in a prospective controlled trial, further supporting our planned U.S. registration trial for this product," said Dr. Paul Walker, President and CEO of Spectral. "The degree of reduction in mortality demonstrated by Toraymyxin(TM) in the EUPHAS trial is an unprecedented result for sepsis therapies. We believe that Toraymyxin(TM), when used together with our proprietary Endotoxin Activity Assay (EAA(TM)), has the potential to fulfill an unmet need for the approximately 125,000 patients that develop severe sepsis or septic shock in the U.S. each year. Our work towards obtaining an Investigational Device Exemption (IDE) from the U.S. FDA is on schedule and we should be in a position to initiate our registration trial for Toraymyxin(TM) following IDE approval."

Financial Review

For the second quarter ended June 30, 2009, Spectral reported revenues of $776,000, compared to $785,000 for the corresponding period in 2008. For the six months ended June 30, 2009, revenues were $1,618,000 compared to $1,449,000 for the same 2008 period. Sales of the EAA(TM) diagnostic increased, while royalty and reagent revenues from the Company's proprietary Troponin I products remained consistent with prior year levels.

Operating expenses for the second quarter ended June 30, 2009 were $1,186,000, compared to $978,000 for the corresponding period in 2008. For the six months ended June 30, 2009, operating expenses were $2,229,000 compared to $1,954,000 in the same 2008 period. The increase in operating expenses in the first half of the year was entirely due to incremental consulting costs related to the development of the clinical pathway for Toraymyxin(TM) and the foreign exchange impact of a rising Canadian dollar against the U.S. currency. Operating expenses related to the existing business remained consistent with prior year levels.

For the second quarter ended June 30, 2009, the Company reported a loss of $701,000 or ($0.03) per share, compared to a loss of $419,000 or ($0.02) per share for the corresponding period in 2008. The second quarter loss included the above-mentioned consulting costs and foreign exchange loss, totaling $248,000, and an unrealized loss on the Company's bond portfolio ($91,000). For the six months ended June 30, 2009, the Company reported a loss of $1,105,000 or ($0.05) per share, compared to a loss of $867,000 or ($0.04) per share for the corresponding period in 2008.

Cash and short term investments as at June 30, 2009 totaled $3,436,000, compared to $4,297,000 as at December 31, 2008. Management expects that the Company will maintain a cash and short term investment balance of approximately $3,000,000 for the rest of 2009.

About Spectral Diagnostics

Spectral is a leader in the battle against sepsis. Spectral's lead product is its Endotoxin Activity Assay (EAA(TM)), the only FDA cleared assay for the measurement of endotoxin. With the growing awareness for the role of endotoxemia in sepsis and the increasing number of therapies being developed to treat endotoxemia, Spectral is well-positioned to promote the adoption of the EAA(TM), which can be used to identify patients, enable therapeutics and monitor treatment. 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.


    Spectral Diagnostics Inc.
    Balance Sheets - unaudited
    As at June 30, 2009 and December 31, 2008
    -------------------------------------------------------------------------
    (in thousands of dollars)

                                                            2009        2008
                                                               $           $

    Assets

    Current assets
    Cash and cash equivalents                                491         297
    Short-term investments                                 2,945       4,000
    Accounts receivable                                      741         860
    Inventories                                              187         203
    Prepaid expenses                                         122          42
                                                      -----------------------

                                                           4,486       5,402

    Property, plant and equipment                            459         493

    Commercial instruments                                   114         132

    Purchased technology and trademarks                      823       1,058
                                                      -----------------------

                                                           5,882       7,085
                                                      -----------------------
                                                      -----------------------

    Liabilities

    Current liabilities
    Accounts payable and accrued liabilities                 446         540

    Deferred revenue                                         236         322

    Convertible notes payable                              2,254       2,172
                                                      -----------------------

                                                           2,936       3,034
                                                      -----------------------

    Shareholders' Equity

    Common shares                                          2,524       2,524

    Other equity                                           5,716       5,716

    Deficit                                               (5,294)     (4,189)
                                                      -----------------------

                                                           2,946       4,051
                                                      -----------------------

                                                           5,882       7,085
                                                      -----------------------
                                                      -----------------------



    Spectral Diagnostics Inc.
    Statements of Operations, Comprehensive Loss and Deficit - unaudited
    For the six months ended June 30, 2009 and 2008
    -------------------------------------------------------------------------
    (in thousands of dollars, except share and per share data)

                                      3 Months Ended          6 Months Ended
                                             June 30                 June 30
                                    2009        2008        2009        2008
                                       $           $           $           $

    Sales                            776         785       1,618       1,449

    Cost of sales                    166         189         350         389
                              ----------------------- -----------------------

    Gross margin                     610         596       1,268       1,060
                              ----------------------- -----------------------

    Operating expenses
    Selling, general and
     administrative                  927         774       1,818       1,566
    Amortization                     159         164         323         318
    Foreign exchange loss             84           7          52           2
    Stock-based compensation           -          22           -          43
    Research and product
     development, net of
     tax credits                      16          11          36          25
                              ----------------------- -----------------------

                                   1,186         978       2,229       1,954
                              ----------------------- -----------------------

    Loss before the following       (576)       (382)       (961)       (894)

    Interest expense on
     convertible notes payable       (41)        (41)        (82)        (82)

    Other net investment
     (loss) income                   (84)          4         (62)        109

                              ----------------------- -----------------------

    Loss and comprehensive
     loss for the period            (701)       (419)     (1,105)       (867)

    Deficit - Beginning of
     period                       (4,593)     (3,135)     (4,189)     (2,687)
                              ----------------------- -----------------------

    Deficit - End of period       (5,294)     (3,554)     (5,294)     (3,554)
                              ----------------------- -----------------------
                              ----------------------- -----------------------

    Basic and diluted loss
     per common share              (0.03)      (0.02)      (0.05)      (0.04)
                              ----------------------- -----------------------
                              ----------------------- -----------------------

    Weighted average number
     of common shares
     outstanding              24,118,424  24,118,424  24,118,424  24,118,424
                              ----------------------- -----------------------
                              ----------------------- -----------------------



    Spectral Diagnostics Inc.
    Statements of Cash Flows - unaudited
    For the six months ended June 30, 2009 and 2008
    -------------------------------------------------------------------------
    (in thousands of dollars)

                                      3 Months Ended          6 Months Ended
                                             June 30                 June 30
                                    2009        2008        2009        2008
                                       $           $           $           $

    Cash provided by (used in)

    Operating activities
    Loss and comprehensive
     loss for the period            (701)       (419)     (1,105)       (867)
    Items not affecting cash
      Amortization                   159         164         323         318
      Amortization of
       commercial instruments
       included in cost of sales      22           7          43          12
      Stock-based
       compensation expense            -          22           -          43
      Interest on convertible
       notes payable                  41          41          82          82
      Unrealized loss on
       short-term investments         91           -          91           -
    Changes in non-cash
     working capital                 344           -         (39)       (167)
                              ----------------------- -----------------------
                                     (44)       (185)       (605)       (579)
                              ----------------------- -----------------------

    Financing activities
    Bank indebtedness               (385)        195           -         195
                              ----------------------- -----------------------

    Investing activities
    Purchase of property,
     plant and equipment             (51)       (101)        (54)       (115)
    Purchase of commercial
     instruments                      (3)          -         (25)        (22)
    Decrease (increase) in
     short-term investments        1,001           2         964        (101)
    Decrease in deferred
     revenue                         (43)         (5)        (86)         (8)
                              ----------------------- -----------------------
                                     904        (104)        799        (246)
                              ----------------------- -----------------------

    Increase (decrease) in
     cash and cash equivalents
     during the period               475         (94)        194        (630)
                              ----------------------- -----------------------

    Cash and cash equivalents
     - Beginning of period            16         102         297         638
                              ----------------------- -----------------------

    Cash and cash equivalents
     - End of period                 491           8         491           8
                              ----------------------- -----------------------
                              ----------------------- -----------------------


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SOURCE Spectral Diagnostics Inc.
Copyright©2009 PR Newswire.
All rights reserved

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