Full Press Release Details
Spectral AI Announces 2025 First Quarter Financial
DALLAS, TX - May 13, 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 first
quarter ended March 31, 2025 and provided an update on its ongoing business activities.
"During the first quarter we continued to
execute against our strategic plan and are working hard towards our De Novo submission to the FDA by the end of the first half of 2025,"
said Dr. J. Michael DiMaio, M.D., the Company's Chairman of the Board. "We made important strides in the validation of the
diagnostic results of our DeepView System for burn indication through the completion
of our Burn Validation Study in March, 2025. The goal of the Burn Validation Study was to further demonstrate the innovative and versatile
nature of Spectral AI's DeepView technology, as well as its ability to predict burn wound healing potential on the first day of
injury with greater performance and speed than the methods currently used today. With the rigorous statistical analysis support, the DeepView
System continues to outperform the clinical judgment of burn physicians by a large margin."
Dr. DiMaio concluded, "I am pleased with
the operating results through the first quarter of 2025 and our team remains dedicated as we continue to drive towards our FDA De Novo
submission by the end of the first half of 2025; and I'm proud of the work of our team to realize this significant milestone in
the Company's history."
SELECT BUSINESS HIGHLIGHTS
Q1 2025 FINANCIAL RESULTS OVERVIEW
All comparisons are to the first quarter
ended March 31, 2024 ("Q1 2024") unless otherwise stated.
Research & Development Revenue 1
Research & Development
Revenue for Q1 2025 rose 6.0% to $6.7 million from $6.3 million, reflecting an increased level of activity under the Company's contract
with BARDA (the "BARDA PBS Contract").
Gross margin for Q1 2025
improved to 47.2% from 46.6%, due to a slightly higher concentration of direct labor as a component of reimbursement under the BARDA PBS
Contract as compared to the first quarter of 2024.
General & Administrative
General & administrative expenses in Q1 2025
were reduced to $4.1 million from $5.1 million reflecting a directed focus on work by the Company on the BARDA PBS Contract.
Other Income/(Expense)
Other income/(expense) in Q1 2025 increased $4.9
million from $(1.0) million primarily relating to the Company recording a decrease in the fair value of its warrant liability of $4.4
million in Q1 2025. In addition, transaction costs were $0 as compared to $(0.8) million for the first quarter of 2024, which related
to the Company's previously announced financing agreements (see "Financial Condition" section below).
The Company reported net income for Q1 2025 of
$2.9 million, compared to a net loss of $(3.2) million, primarily due to the change in the fair value of the Company's warrant liability.
As of March 31, 2025, cash improved to $14.1 million
from $5.2 million at December 31, 2024.
As noted above, the Company completed a debt financing
agreement of up to $15.0 million from Avenue Capital Group, with an initial draw down of $8.5 million in March 2025 and also raised approximately
$2.7 million of equity financing from institutional and other new and existing investors as part of that transaction.
Additionally, the Company satisfied the remaining
payment obligations of its fixed price standby equity purchase agreement ("SEPA") with a long-only investor in February, 2025.
The Company reiterates its revenue guidance 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 the burn indication or any additional material financial contributions that may
result from the commercialization of our DeepView System.
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-events/events.
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. The DeepView System is being developed as a predictive device to offer clinicians an objective and immediate
assessment of a burn 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, the DeepView System is expected to provide fast and accurate treatment
insight towards value care by improving patient outcomes and reducing healthcare costs. For more information about the DeepView System,
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 statements.
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.
For Media and Investor Relations, please contact:
Atlanta Capital Partners LLC
(866) 692-6847 Toll Free - U.S. & Canada
(404) 281-8556 Mobile and WhatsApp
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 14,061 | $ | 5,157 | ||||
| Accounts receivable, net | 2,103 | 2,505 | ||||||
| Inventory | 437 | 425 | ||||||
| Prepaid expenses | 1,287 | 1,289 | ||||||
| Other current assets | 840 | 746 | ||||||
| Total current assets | 18,728 | 10,122 | ||||||
| Non-current assets: | ||||||||
| Property and equipment, net | 164 | 2 | ||||||
| Right-of-use assets | 1,830 | 1,971 | ||||||
| Total Assets | $ | 20,722 | $ | 12,095 | ||||
| Liabilities and Stockholders' Deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 3,113 | $ | 4,035 | ||||
| Accrued expenses | 3,712 | 3,210 | ||||||
| Deferred revenue | 663 | 960 | ||||||
| Lease liabilities, short-term | 474 | 201 | ||||||
| Notes payable, current | 244 | 422 | ||||||
| Notes payable - at fair value | - | 2,365 | ||||||
| Warrant liabilities | 5,106 | 6,451 | ||||||
| Total current liabilities | 13,312 | 17,644 | ||||||
| Note payable, long-term | 7,512 | - | ||||||
| Lease liabilities, long-term | 1,524 | 1,702 | ||||||
| Total Liabilities | 22,348 | 19,346 | ||||||
| Stockholders' Deficit | ||||||||
| Preferred stock ($0.0001 par value); 1,000,000 shares authorized; no shares issued and outstanding as of March 31, 2025 and December 31, 2024 | - | - | ||||||
| Common stock ($0.0001 par value); 80,000,000 shares authorized; 25,588,121 and 22,594,877 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively | 2 | 2 | ||||||
| Additional paid-in capital | 43,684 | 40,973 | ||||||
| Accumulated other comprehensive income | 20 | 3 | ||||||
| Accumulated deficit | (45,332 | ) | (48,229 | ) | ||||
| Total Stockholders' Deficit | (1,626 | ) | (7,251 | ) | ||||
| Total Liabilities and Stockholders' Deficit | $ | 20,722 | $ | 12,095 |
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Research and development revenue | $ | 6,707 | $ | 6,326 | ||||
| Cost of revenue | (3,539 | ) | (3,381 | ) | ||||
| Gross profit | 3,168 | 2,945 | ||||||
| Operating costs and expenses: | ||||||||
| General and administrative | 4,064 | 5,088 | ||||||
| Total operating costs and expenses | 4,064 | 5,088 | ||||||
| Operating loss | (896 | ) | (2,143 | ) | ||||
| Other income (expense): | ||||||||
| Net interest (expense) income | (20 | ) | 14 | |||||
| Borrowing related costs | (581 | ) | (276 | ) | ||||
| Change in fair value of warrant liability | 4,253 | 20 | ||||||
| Change in fair value of notes payable | 220 | 66 | ||||||
| Foreign exchange transaction loss, net | (8 | ) | (16 | ) | ||||
| Other income (expense), including transaction costs | - | (848 | ) | |||||
| Total other income (expense), net | 3,864 | (1,040 | ) | |||||
| Income (loss) before income taxes | 2,968 | (3,183 | ) | |||||
| Income tax provision | (71 | ) | (22 | ) | ||||
| Net income (loss) | $ | 2,897 | $ | (3,205 | ) |