Full Press Release Details
AI Announces 2023 Third Quarter Financial Results
Continuing Progress in Developing and Commercializing AI-Driven DeepView System Wound Healing Assessment Technology
Full Year Revenue Guidance for 2023 and 2024
November 13, 2023 - 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 third quarter ended September 30, 2023 ("Q3 2023").
has been an extraordinary period for Spectral AI, highlighted by our September listing on Nasdaq, continued progress towards developing
and commercializing our AI-Driven DeepView System wound healing assessment platform for burn and diabetic foot ulcers
("DFU"), and the recent receipt of the largest contract in our history a $149 million award from the United States government
to advance our DeepView System for burn wound assessment," said Wensheng Fan, CEO of Spectral AI.
believe that our DeepView System is the only digital predictive medical diagnostic product that provides clinicians with
an objective and immediate assessment of a wound's healing potential through the application of AI. Multiple clinical studies have
validated the efficacy of our DeepView System in assessing - within seconds - whether a wound will heal on its own or
will require medical intervention to do so. In the case of burn, where our DeepView System's current accuracy is
92% for adults and 88% for pediatrics, a non-healing assessment may suggest a surgical referral as well as determining which specific
areas require excision and grafting. For DFU, where our DeepView System's accuracy is 86%, a non-healing assessment
may justify the immediate use of advanced wound care therapy as opposed to the current wait-and-see' approach. In each case,
our DeepView System is designed to support clinicians in placing their patients on an informed, defined, and immediate
path to healing, while improving outcomes, reducing hospital stays, and eliminating unnecessary expenses."
Fan concluded, "We are preparing across all fronts for the commercial launch of our DeepView System as early as
2024 following the receipt of necessary regulatory approvals. To that end, we remain on track to submit applications for FDA, UKCA, and
CE mark approval for the DeepView System DFU indication and 3D wound measurement in 2024 and for FDA and CE mark approval
for the burn indication in 2025. As previously announced, we also expect 2024 revenue growth of approximately 60% from anticipated 2023
2023 FINANCIAL RESULTS OVERVIEW
comparisons are to the third quarter ended September 30, 2022 ("Q3 2022") unless otherwise stated.
Company is reiterating its revenue guidance of approximately $17.4 million for full year 2023 and approximately $28.0 million for full
year 2024. Financial guidance for FY2024 does not reflect the material financial contributions the Company expects would result from
the commercialization of our DeepView System for DFU and 3D wound measurement following the receipt of necessary regulatory
2023 OPERATIONS OVERVIEW
Company will host a conference call on Tuesday, November 14, 2023 at 9:00 am Eastern Time to discuss the results. Investors interested
in participating in the live call can dial:
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-events/events
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 diagnostic 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 substantially 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.
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
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 statements.
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.
| Contacts: | |
| Investors: | |
| Spectral AI | The Equity Group |
| Vince Capone | Devin Sullivan, Managing Director |
| General Counsel | dsullivan@equityny.com |
| ir@spectral-ai.com | |
| Conor Rodriguez, Analyst | |
| crodriguez@equityny.com | |
| Media: | |
| Russo Partners | |
| David Schull | Guillermo Ruiz, M.D., Ph.D. |
| Russo Partners | Russo Partners |
| (858) 717-2310 | (646) 218-4604 |
| david.schull@russopartnersllc.com | guillermo.ruiz@russopartnersllc.com |
Unaudited Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
| September 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 7,348 | $ | 14,174 | ||||
| Accounts receivable, net | 1,312 | 2,294 | ||||||
| Inventory | 220 | - | ||||||
| Unbilled revenue | 127 | 618 | ||||||
| Prepaid expenses | 1,755 | 331 | ||||||
| Other current assets | 594 | 270 | ||||||
| Total current assets | 11,356 | 17,687 | ||||||
| Non-current assets: | ||||||||
| Property and equipment, net | 14 | 21 | ||||||
| Right-of-use assets | 961 | 1,008 | ||||||
| Total Assets | $ | 12,331 | $ | 18,716 | ||||
| Commitments and contingencies (Note 8) | ||||||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 3,275 | $ | 2,759 | ||||
| Accrued expenses | 3,983 | 2,631 | ||||||
| Deferred revenue | 795 | - | ||||||
| Lease liabilities, short-term | 813 | 680 | ||||||
| Notes payable | 632 | 175 | ||||||
| Warrant liabilities | 1,149 | 129 | ||||||
| Total current liabilities | 10,647 | 6,374 | ||||||
| Lease liabilities, long-term | 228 | 346 | ||||||
| Total Liabilities | 10,875 | 6,720 | ||||||
| Stockholders' Equity | ||||||||
| Preferred stock ($0.0001 par value); 1,000,000 shares authorized; no shares issued and outstanding as of September 30, 2023 and December 31, 2022 | - | - | ||||||
| Common stock ($0.0001 par value); 80,000,000 shares authorized; 15,688,268 and 13,127,472 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 2 | 1 | ||||||
| Additional paid-in capital | 30,696 | 23,929 | ||||||
| Accumulated deficit | (29,242 | ) | (11,934 | ) | ||||
| Total stockholders' equity | 1,456 | 11,996 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 12,331 | $ | 18,716 |
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Research and development revenue | $ | 3,440 | $ | 7,038 | $ | 12,769 | $ | 19,272 | ||||||||
| Cost of revenue | (1,968 | ) | (3,811 | ) | (7,325 | ) | (10,943 | ) | ||||||||
| Gross profit | 1,472 | 3,227 | 5,444 | 8,329 | ||||||||||||
| Operating costs and expenses: | ||||||||||||||||
| General and administrative | 5,638 | 3,478 | 15,499 | 9,207 | ||||||||||||
| Total operating costs and expenses | 5,638 | 3,478 | 15,499 | 9,207 | ||||||||||||
| Operating loss | (4,166 | ) | (251 | ) | (10,055 | ) | (878 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Net interest income | 42 | 2 | 128 | 1 | ||||||||||||
| Change in fair value of warrant liability | 1,069 | 22 | 1,004 | 50 | ||||||||||||
| Foreign exchange transaction loss, net | (24 | ) | (51 | ) | (11 | ) | (255 | ) | ||||||||
| Transaction costs | (7,604 | ) | - | (8,342 | ) | - | ||||||||||
| Other expense | - | (17 | ) | - | - | |||||||||||
| Total other expense, net | (6,517 | ) | (44 | ) | (7,221 | ) | (204 | ) | ||||||||
| Loss before income taxes | (10,683 | ) | (295 | ) | (17,276 | ) | (1,082 | ) | ||||||||
| Income tax benefit (provision) | 54 | (85 | ) | (32 | ) | (91 | ) | |||||||||
| Net loss | $ | (10,629 | ) | $ | (380 | ) | $ | (17,308 | ) | $ | (1,173 | ) | ||||
| Net loss per share of common stock | ||||||||||||||||
| Basic and Diluted | $ | (0.77 | ) | $ | (0.03 | ) | $ | (1.29 | ) | $ | (0.09 | ) | ||||
| Weighted average common shares outstanding | ||||||||||||||||
| Basic and Diluted | 13,822,990 | 13,145,834 | 13,410,287 | 13,127,825 |
use Adjusted EBITDA as a non-GAAP metric when measuring performance, including when measuring current period results against prior periods'
Adjusted EBITDA. This non-GAAP financial measure should be considered in addition to results prepared in accordance with GAAP and
should not be considered as a substitute for, or superior to, GAAP results. In addition, Adjusted EBITDA should not be construed as an
indicator of our operating performance, liquidity or cash flows generated by operating, investing and financing activities, as there
may be significant factors or trends that it fails to address.
of their non-standardized definitions, non-GAAP measures (unlike GAAP measures) may not be comparable to the calculation of similar measures
of other companies. We caution investors that non-GAAP financial information, by its nature, departs from traditional accounting conventions.
Supplemental non-GAAP measures are presented solely to permit investors to more fully understand how Spectral AI's management assesses
underlying performance.
define Adjusted EBITDA as net loss excluding income taxes, depreciation of property and equipment, interest income, stock compensation,
transaction costs and any non-operating financial income and expense.
following table presents our Adjusted EBITDA for the three and nine months ended September 30, 2023 and 2022:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (In thousands) | ||||||||||||||||
| Net loss | $ | (10,629 | ) | $ | (380 | ) | $ | (17,308 | ) | $ | (1,173 | ) | ||||
| Adjust: | ||||||||||||||||
| Depreciation expense | 2 | - | 7 | 6 | ||||||||||||
| Provision for income taxes | (54 | ) | 85 | 32 | 91 | |||||||||||
| Net interest income | (42 | ) | (2 | ) | (128 | ) | (1 | ) | ||||||||
| EBITDA | (10,723 | ) | (297 | ) | (17,397 | ) | (1,077 | ) | ||||||||
| Additional adjustments: | ||||||||||||||||
| Stock-based compensation | 279 | 247 | 975 | 874 | ||||||||||||
| Change in fair value of warrant liability | (1,069 | ) | (22 | ) | (1,004 | ) | (50 | ) | ||||||||
| Foreign exchange transaction gain | 24 | 51 | 11 | 255 | ||||||||||||
| Transaction costs | 7,604 | - | 8,342 | - | ||||||||||||
| Other income | - | 17 | - | - | ||||||||||||
| Adjusted EBITDA | $ | (3,885 | ) | $ | (4 | ) | $ | (9,073 | ) | $ | 2 |