Full Press Release Details
Spectral AI Announces 2023 Fourth Quarter and Full
Year Financial Results
2023 Research & Development
Revenue of $18.1 Million Expected to Increase to $28.0 Million in 2024
Commercialization Underway
with Revenue Expected in 2H 2024 for DeepView AI -Burn Indication in the UK
On Track for Additional Regulatory
Submissions in US and UK for DeepView System Burn and Diabetic Foot
DALLAS, TX - March 27, 2024
- 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
fourth quarter ("Q4 2023") and full year ("FY 2023") ended December 31, 2023 and provided an update on its ongoing
business activities.
"Spectral AI achieved much
in 2023, and our progress along multiple fronts has continued into 2024," said Peter M. Carlson, Chief Executive Officer. "The
team's achievements to date, and those on the horizon, are the result of a 10-year record of success in delivering on a promise
to develop and commercialize our proprietary AI-Driven DeepView System wound
healing assessment platform, a technology that we believe can help change the standard of care while delivering value across the healthcare
ecosystem. We expect to realize our first commercial product revenue in the second half of this year. Given the pace of our product development
and clinical activities in the US and internationally, we believe that we are on the proper path to generate commercial revenue across
four separate DeepView System platforms covering burn and diabetic foot ulcer
(DFU) within the next three years.
"We have a well-defined business
focus for 2024 based on the evolution of our DeepView System from clinical
stage to commercialization. We will continue to advance our research and development work under current US Government contracts for our
DeepView System burn indication and plan to submit regulatory filings for the
approval of this indication in the US in the first half of 2025. We are pursuing the commercialization of our DeepView
System for the assessment of DFU in the US and the UK, and expect to submit regulatory filings for the approval of this indication in
the US and UK in 2024. Our recent financing agreements in combination with the multi-year, non-dilutive funding provided by our US Government
contracts provides us with a sound financial foundation to pursue these objectives."
2023-2024 SELECT BUSINESS HIGHLIGHTS
First Commercial Product Revenue
2023 FINANCIAL RESULTS OVERVIEW
All comparisons to Q4 2023 and FY 2023
are to the comparable periods ended December 31, 2022, unless otherwise stated.
Research & Development Revenue
Research & Development Revenue1
for Q4 2023 was $5.3 million compared to $6.1 million, primarily due to the implementation of the new BARDA PBS contract, executed in
For FY 2023, Research & Development
revenue was $18.1 million compared to $25.4 million, reflecting a decrease in activity due to the completion of work under the BARDA Burn
II contract, partially offset by the commencement of work under the new BARDA PBS contract.
Gross margin for Q4 2023 was 46.1% compared
For FY 2023, gross margin rose to
43.6% from 42.7%. The improvement in gross margin for both periods reflected the commencement of work under the BARDA PBS contract, which
carries a higher reimbursement rate than the prior BARDA Burn II contract.
General & Administrative Expense
General & administrative expenses
in Q4 2023 were $5.4 million compared to $4.3 million.
For FY 2023, general & administrative
expenses rose to $20.9 million from $13.5 million. The increase for both periods was the result of increased headcount required to support
our organizational growth, and higher costs associated with an increase in non-revenue generating R&D activities.
Net loss for Q4 2023 was $(3.5) million,
or $(0.22) per share, compared to a net loss of $(1.7) million, or $(0.13) per share, for Q4 2022.
For FY 2023, the net loss was $(20.9)
million, or $(1.48) per share, compared to a net loss of $(2.9) million, or $(0.22) per share, for FY 2022.
Net loss for the 2023 period included
$8.3 million of non-recurring transaction costs associated with the consummation of the Company's business combination that resulted
in its Nasdaq listing; there were no such costs incurred in 2022.
As of December 31, 2023, cash was $4.8 million and the
Company had no long-term debt. During the first quarter of 2024, the Company enhanced its financial position, as follows:
The Company is reiterating its revenue
guidance of approximately $28.0 million for FY 2024. Financial guidance for FY 2024 does not reflect expected contributions from the sale
of the DeepView System for burn in the UK beginning in the second half of 2024
or any additional material financial contributions that may result from the commercialization of our DeepView
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:
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-
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
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 | Conor Rodriguez | |
| Managing Director | Analyst | |
| dsullivan@equityny.com | crodriguez@equityny.com | |
| Media: | ||
| Russo Partners David Schull Russo Partners (858) 717-2310 | ||
| david.schull@russopartnersllc.com |
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
| December 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 4,790 | $ | 14,174 | ||||
| Accounts receivable, net | 2,346 | 2,294 | ||||||
| Inventory | 230 | - | ||||||
| Unbilled revenue | - | 618 | ||||||
| Deferred offering costs | 283 | - | ||||||
| Prepaid expenses | 1,452 | 331 | ||||||
| Other current assets | 801 | 270 | ||||||
| Total current assets | 9,902 | 17,687 | ||||||
| Non-current assets: | ||||||||
| Property and equipment, net | 12 | 21 | ||||||
| Right-of-use assets | 778 | 1,008 | ||||||
| Total Assets | $ | 10,692 | $ | 18,716 | ||||
| Commitments and contingencies (Note 8) | ||||||||
| Liabilities and Stockholders' Equity (Deficit) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,683 | $ | 2,759 | ||||
| Accrued expenses | 4,300 | 2,631 | ||||||
| Deferred revenue | 2,311 | - | ||||||
| Lease liabilities, short-term | 853 | 680 | ||||||
| Notes payable | 436 | 175 | ||||||
| Warrant liabilities | 1,818 | 129 | ||||||
| Total current liabilities | 12,401 | 6,374 | ||||||
| Lease liabilities, long-term | - | 346 | ||||||
| Total Liabilities | 12,401 | 6,720 | ||||||
| Stockholders' Equity (Deficit) | ||||||||
| Preferred stock ($0.0001 par value); 1,000,000 shares authorized; no shares issued and outstanding as of December 31, 2023 and December 31, 2022 | - | - | ||||||
| Common stock ($0.0001 par value); 80,000,000 shares authorized; 16,294,935 and 13,170,148 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively | 2 | 1 | ||||||
| Additional paid-in capital | 31,065 | 23,929 | ||||||
| Accumulated other comprehensive income | 12 | - | ||||||
| Accumulated deficit | (32,788 | ) | (11,934 | ) | ||||
| Total Stockholders' Equity (Deficit) | (1,709 | ) | 11,996 | |||||
| Total Liabilities and Stockholders' Equity (Deficit) | $ | 10,692 | $ | 18,716 |
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Research and development revenue | $ | 5,287 | $ | 6,096 | $ | 18,056 | $ | 25,368 | ||||||||
| Cost of revenue | (2,851 | ) | (3,588 | ) | (10,176 | ) | (14,531 | ) | ||||||||
| Gross profit | 2,436 | 2,508 | 7,880 | 10,837 | ||||||||||||
| Operating costs and expenses: | ||||||||||||||||
| General and administrative | 5,365 | 4,277 | 20,864 | 13,484 | ||||||||||||
| Total operating costs and expenses | 5,365 | 4,277 | 20,864 | 13,484 | ||||||||||||
| Operating loss | (2,929 | ) | (1,769 | ) | (12,984 | ) | (2,647 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Net interest income | 44 | 20 | 172 | 21 | ||||||||||||
| Change in fair value of warrant liability | (669 | ) | 7 | 335 | 57 | |||||||||||
| Foreign exchange transaction loss, net | (13 | ) | 18 | (24 | ) | (237 | ) | |||||||||
| Transaction costs | - | - | (8,342 | ) | - | |||||||||||
| Total other expense, net | (638 | ) | 45 | (7,859 | ) | (159 | ) | |||||||||
| Loss before income taxes | (3,567 | ) | (1,724 | ) | (20,843 | ) | (2,806 | ) | ||||||||
| Income tax provision | 21 | (15 | ) | (11 | ) | (106 | ) | |||||||||
| Net loss | $ | (3,546 | ) | $ | (1,739 | ) | $ | (20,854 | ) | $ | (2,912 | ) | ||||
| Net loss per share of common stock | ||||||||||||||||
| Basic and Diluted | $ | (0.22 | ) | $ | (0.13 | ) | $ | (1.48 | ) | $ | (0.22 | ) | ||||
| Weighted-average common shares outstanding | ||||||||||||||||
| Basic and Diluted | 16,097,399 | 13,164,086 | 14,087,586 | 13,136,965 | ||||||||||||
| Other comprehensive income: | ||||||||||||||||
| Foreign currency translation adjustments | $ | 12 | $ | - | $ | 12 | $ | - | ||||||||
| Total comprehensive loss | $ | (3,534 | ) | $ | (1,739 | ) | $ | (20,842 | ) | $ | (2,912 | ) |
Condensed Consolidated Statements of Cash Flows
(in thousands, except share and per share data)