Full Press Release Details
Announces 2024 Fourth Quarter and Full Year Financial Results 2024
Research & Development Revenue of $30 Million
Successful Results from the US Burn
On Track for Regulatory Submission
in US for DeepView System
DALLAS, TX - March 27, 2025 -
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 2024") and full year ("FY 2024") ended December 31, 2024, and provided an update on
its ongoing business activities.
"Spectral AI achieved much in 2024.
Our top-line revenue reflects extensive work on our BARDA PBS contract, and our progress along multiple fronts has continued into 2025,"
said Dr. J. Michael DiMaio, M.D., the Company's Chairman of the Board. "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 the US government and the American people 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 other indications within the next three years.
"We have a well-defined business
focus for 2025 based on the evolution of our DeepView System from clinical stage to commercialization. We will continue to advance our
research and development work under our 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 this year. Our recent financing agreements and the multi-year,
non-dilutive funding provided by our US government contracts provide us with a sound financial foundation to pursue these objectives."
2024-2025 SELECT BUSINESS HIGHLIGHTS
Burn Validation Study
2024 FINANCIAL RESULTS OVERVIEW
All comparisons to Q4 2024 and FY
2024 are to the comparable periods ended December 31, 2023, unless otherwise stated.
Research & Development Revenue
Research & Development Revenue1
for Q4 2024 was $7.6 million compared to $5.3 million, primarily due to the increased overall percentage of work on the BARDA PBS contract
which was awarded in September 2023.
For FY 2024, Research & Development
revenue was $29.6 million, a 63.5% increase from $18.1 million in 2023. The year-over-year increase reflects
the expanded work on the BARDA PBS contract for the full year 2024.
Gross margin for Q4 2024 was 44.0% compared
to 46.1% in the prior year period, due primarily to a smaller percentage of direct labor as a proportion
of total work on the BARDA PBS contract.
For FY 2024, gross margin rose to 44.9%
from 43.6%. The improvement in gross margin reflected the expansion of work under the BARDA PBS contract, which carries a higher reimbursement
rate than the prior BARDA Burn II contract, which had comprised the majority of revenue in 2023.
General & Administrative Expense
General & administrative expenses
in Q4 2024 were $4.5 million compared to $5.4 million. The decrease in Q4 2024 represented reduced spending on legal and accounting consultants.
For FY 2024, general & administrative
expenses decreased to $19.9 million from $20.9 million. The decrease for the year was a result of less overall spending in non-revenue
generating R&D activities.
Net loss for Q4 2024 was $(7.7) million,
or $(0.41) per share, compared to a net loss of $(3.5) million, or $(0.22) per share, for Q4 2023.
For FY 2024, the net loss was $(15.3)
million, or $(0.85) per share, compared to a net loss of $(20.9) million, or $(1.48) per share, for FY 2023.
Net loss for FY 2024 included $4.6 million
of charges for the change in the fair value of the Company's warrant liabilities and $2.9 million of borrowing related expenses
associated with the Company's satisfaction of the Yorkville pre-paid note obligations; there were no such costs incurred in 2023.
In FY 2023, the Company incurred $8.3 million in costs associated with its financing operations relating to its business combination.
As of December 31, 2024, cash was $5.2 million.
During the first quarter of 2025, the Company enhanced its
financial position, as follows:
The Company is forecasting revenue of
approximately $21.5 million for FY 2025. Financial guidance for FY 2025 does not reflect contributions from the sale of the DeepView System
for burn in the UK or Australia 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. 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, 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
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Condensed Consolidated Balance Sheets
| December 31, 2024 | December 31, 2023 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 5,157 | $ | 4,790 | ||||
| Accounts receivable, net | 2,505 | 2,346 | ||||||
| Inventory | 425 | 230 | ||||||
| Unbilled revenue | - | - | ||||||
| Deferred offering costs | - | 283 | ||||||
| Prepaid expenses | 1,289 | 1,452 | ||||||
| Other current assets | 746 | 801 | ||||||
| Total current assets | 10,122 | 9,902 | ||||||
| Non-current assets: | ||||||||
| Property and equipment, net | 2 | 12 | ||||||
| Right-of-use assets | 1,971 | 778 | ||||||
| Total Assets | $ | 12,095 | $ | 10,692 | ||||
| Liabilities and Stockholders' Equity (Deficit) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,035 | $ | 2,683 | ||||
| Accrued expenses | 3,210 | 4,300 | ||||||
| Deferred revenue | 960 | 2,311 | ||||||
| Lease liabilities, short-term | 201 | 853 | ||||||
| Notes payable | 422 | 436 | ||||||
| Note payable - at fair value | 2,365 | - | ||||||
| Warrant liabilities | 6,451 | 1,818 | ||||||
| Total current liabilities | 17,644 | 12,401 | ||||||
| Lease liabilities, long-term | 1,702 | - | ||||||
| Total Liabilities | 19,346 | 12,401 | ||||||
| Stockholders' Equity (Deficit) | ||||||||
| Preferred stock ($0.0001 par value); 1,000,000 shares authorized; no shares issued and outstanding as of December 31, 2024 and December 31, 2023 | 0 | 0 | ||||||
| Common stock ($0.0001 par value); 80,000,000 shares authorized; 22,594,877 and 16,294,935 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively | 2 | 2 | ||||||
| Additional paid-in capital | 40,847 | 31,065 | ||||||
| Accumulated other comprehensive income | 3 | 12 | ||||||
| Accumulated deficit | (48,103 | ) | (32,788 | ) | ||||
| Total Stockholders' Equity (Deficit) | (7,251 | ) | (1,709 | ) | ||||
| Total Liabilities and Stockholders' Equity (Deficit) | $ | 12,095 | $ | 10,692 |
Condensed Consolidated Statements
(in thousands, except share and per
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Research and development revenue | $ | 7,604 | $ | 5,287 | $ | 29,581 | $ | 18,056 | ||||||||
| Cost of revenue | (4,256 | ) | (2,851 | ) | (16,307 | ) | (10,176 | ) | ||||||||
| Gross profit | 3,348 | 2,436 | 13,274 | 7,880 | ||||||||||||
| Operating costs and expenses: | ||||||||||||||||
| General and administrative | 4,459 | 5,365 | 19,856 | 20,864 | ||||||||||||
| Total operating costs and expenses | 4,459 | 5,365 | 19,856 | 20,864 | ||||||||||||
| Operating loss | (1,111 | ) | (2,929 | ) | (6,582 | ) | (12,984 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Net interest income | 14 | 44 | 14 | 172 | ||||||||||||
| Borrowing related costs | (931 | ) | - | (2,965 | ) | - | ||||||||||
| Change in fair value of warrant liability | (5,350 | ) | (669 | ) | (4,632 | ) | 335 | |||||||||
| Change in fair value of notes payable | (213 | ) | - | (220 | ) | - | ||||||||||
| Foreign exchange transaction loss, net | (9 | ) | (13 | ) | (43 | ) | (24 | ) | ||||||||
| Transaction costs | 1 | - | (616 | ) | (8,342 | ) | ||||||||||
| Total other expense, net | (6,488 | ) | (638 | ) | (8,462 | ) | (7,859 | ) | ||||||||
| Loss before income taxes | (7,599 | ) | (3,567 | ) | (15,044 | ) | (20,843 | ) | ||||||||
| Income tax provision | (143 | ) | 21 | (271 | ) | (11 | ) | |||||||||
| Net loss | $ | (7,742 | ) | $ | (3,546 | ) | $ | (15,315 | ) | $ | (20,854 | ) | ||||
| Net loss per share of common stock | ||||||||||||||||
| Basic and Diluted | $ | (0.41 | ) | $ | (0.22 | ) | $ | (0.85 | ) | $ | (1.48 | ) | ||||
| Weighted-average common shares outstanding | ||||||||||||||||
| Basic and Diluted | 18,810,771 | 16,097,399 | 17,934,218 | 14,087,586 | ||||||||||||
| Other Comprehensive Income | ||||||||||||||||
| Foreign currency translation adjustments | $ | (22 | ) | $ | 12 | $ | (9 | ) | $ | 12 | ||||||
| Total comprehensive loss | $ | (7,764 | ) | $ | (3,534 | ) | $ | (15,324 | ) | $ | (20,842 | ) |
Condensed Consolidated Statements
| Year Ended | ||||||||
| December 31, | ||||||||
| Cash flows from operating activities: | 2024 | 2023 | ||||||
| Net loss | $ | (15,315 | ) | $ | (20,854 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation expense | 10 | 9 | ||||||
| Stock-based compensation | 1,032 | 1,243 | ||||||
| Amortization of right-of-use assets | 578 | 713 | ||||||
| Issuance of shares for transaction costs | - | 4,350 | ||||||
| Change in fair value of warrant liabilities | 4,633 | (335 | ) | |||||
| Change in fair value of notes payable | 220 | - | ||||||
| Costs from issuance of common stock | 372 | - | ||||||
| Issuance of shares for borrowing related costs | 1,143 | - | ||||||
| Changes in operating assets and liabilities: | - | |||||||
| Accounts receivable | (159 | ) | (52 | ) | ||||
| Inventory | (195 | ) | (230 | ) | ||||
| Unbilled revenue | - | 618 | ||||||
| Prepaid expenses | 163 | (377 | ) | |||||
| Other assets | 55 | (404 | ) | |||||
| Accounts payable | 1,426 | (935 | ) | |||||
| Accrued expenses | (1,090 | ) | 1,359 | |||||
| Deferred revenue | (1,351 | ) | 2,311 | |||||
| Lease liabilities | (721 | ) | (656 | ) | ||||
| Net cash used in operating activities | (9,198 | ) | (13,240 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of common stock for Equity Raise | 4,060 | 3,351 | ||||||
| Cash received in Business Combination | - | 660 | ||||||
| Payments for notes payable | 12,096 | - | ||||||
| Proceeds from note payable - related party | 1,000 | - | ||||||
| Payments for notes payable | (7,758 | ) | (483 | ) | ||||
| Stock option exercises | 177 | 316 | ||||||
| Net cash provided by (used in) financing activities | 9,575 | 3,844 | ||||||
| Effect of exchange rate changes on cash | (9 | ) | 12 | |||||
| Net decrease in cash | 367 | (9,384 | ) | |||||
| Cash, beginning of period | 4,790 | 14,174 | ||||||
| Cash, end of period | $ | 5,157 | $ | 4,790 |