This press release is provided by GlobeNewswire and is published as received.
TORONTO, Nov. 02, 2026 (GLOBE NEWSWIRE) -- Spectral Medical Inc. (“Spectral” or the “Company”) (TSX: EDT), a Phase 3 company seeking U.S. FDA approval for its unique product for the treatment of patients with septic shock, Toraymyxin™ (“PMX”), is pleased to announce the closing of the first tranche of a $14.0 million private placement offering (the “Offering”) of convertible unsecured notes (the “2026 Notes”) due on November 1, 2031 (the “Maturity Date”), and the conversion of an aggregate of US$4.5 million (approximately $6.3 million) of maturing convertible notes, and the repayment of an additional US$4.5 million (approximately $6.3 million) of maturing convertible notes. All dollar amounts in this news release are in Canadian dollars unless otherwise stated.
Conversion and Repayment of 2022 Notes and 2023 Notes
Prior to the closing of the Offering, the Company had outstanding US$5.0 million aggregate principal amount of 7.00% convertible senior notes issued on November 2, 2022 (the “2022 Notes”) and US$4.0 million aggregate principal amount of 9.00% convertible senior notes issued on September 7, 2023 (the “2023 Notes”), all of which matured on November 1, 2026.
The holder of US$2.5 million aggregate principal amount of the 2022 Notes and US$2.0 million aggregate principal amount of the 2023 Notes converted those notes in accordance with their terms into an aggregate of 13,870,397 common shares of the Company (the “Common Shares”).
The remaining US$2.5 million aggregate principal amount of the 2022 Notes and US$2.0 million aggregate principal amount of the 2023 Notes, held by Vantive US Healthcare LLC, were not converted and will be repaid by the Company today, together with accrued and unpaid interest thereon, for an aggregate principal amount of US$4.5 million (approximately $6.3 million).
2026 Notes Offering
On October 30, 2026, Spectral issued $7.7 million aggregate principal amount of 2026 Notes in the first tranche of the Offering and expects to issue an additional $6.3 million aggregate principal amount of 2026 Notes in a second tranche to be completed on or about November 6, 2026, subject to customary closing conditions.
Holders may convert all or any portion of their 2026 Notes at any time prior to the Maturity Date into units of the Company (the “Units”) at a conversion price of $1.00 per Unit (the “Conversion Price”), subject to customary anti-dilution adjustments. Each Unit consists of one Common Share and one-half of one Common Share purchase warrant (each whole warrant, a “Warrant”). Each Warrant entitles the holder to acquire one Common Share at an exercise price of $1.10 until the Maturity Date.
The 2026 Notes bear interest at the Canadian Overnight Repo Rate Average plus 800 basis points per annum, accruing from the date of issue and payable semi-annually. On each interest payment date, the Company may elect, in its sole discretion, to pay the interest then due in cash or in kind. Interest paid in kind (“PIK Interest”) will be added to the outstanding principal amount of the 2026 Notes, will bear interest at the same rate and will be convertible into Units at the Conversion Price on the same terms as the 2026 Notes, provided that the Conversion Price is not then lower than the minimum price permitted by the Toronto Stock Exchange (the “TSX”). If it is, the interest then due will instead be satisfied by the issuance of units of the Company (“PIK Units”) at a price per PIK Unit equal to the volume weighted average trading price of the Common Shares on the TSX for the five trading days immediately preceding the applicable interest payment date (the “Market Price”) less a 10% discount. Each PIK Unit shall be comprised of one Common Share and one-half of one common share purchase warrant of the Company, with each whole warrant comprised in the PIK Units exercisable at the Market Price until the Maturity Date. Each issuance of PIK Units is subject to the prior acceptance of the TSX. The maximum aggregate principal amount of 2026 Notes and PIK Units outstanding (including PIK Interest) at the Maturity Date is capped at $28,000,000.
The Company intends to use the net proceeds from the Offering to repay the US$4.5 million (approximately $6.3 million) principal amount of the 2022 Notes and 2023 Notes that were not converted, together with accrued interest, and for general corporate and working capital purposes.
Paradigm Capital Inc. (the “Advisor”) acted as financial advisor to the Company on the Offering and received on the closing of the first tranche a cash commission of $192,500, $192,500 principal amount of 2026 Notes and 385,000 compensation options (the “Compensation Options”), each exercisable for one Common Share at the Conversion Price until the Maturity Date, and will receive similar compensation on the closing of the second tranche. The 2026 Notes issued in the first tranche were purchased by Pinnacle Island II LP (“Pinnacle II”) and the Advisor. The general partner of Pinnacle II is 1000318530 Ontario Inc., a subsidiary of Paradigm Capital Partners Limited, which is an influential securityholder of the Advisor and a limited partner of Pinnacle II. Pinnacle Island LP, an affiliate of Pinnacle II, was the holder of the 2022 Notes and 2023 Notes converted as described above. For so long as any 2026 Notes remain outstanding, Pinnacle II will be entitled to designate a non-voting observer to attend meetings of the Company’s board of directors. The 2026 Notes, including any securities issuable thereunder, and the Compensation Options contain limitations on conversion and exercise required by the TSX that apply to any holder which, together with its affiliates and joint actors, would own more than 9.99% of the outstanding Common Shares and, in the case of Pinnacle II, the Advisor and their affiliates, more than 19.99% of the outstanding Common Shares.
About Spectral
Spectral is a Phase 3 company seeking U.S. FDA approval for its unique product for the treatment of patients with septic shock, Toraymyxin™ (“PMX”). PMX is a therapeutic hemoperfusion device that removes endotoxin, which can cause sepsis, from the bloodstream and is guided by the Company’s FDA-cleared Endotoxin Activity Assay (EAA™), the only FDA-cleared test for endotoxin in blood.
PMX is approved for therapeutic use in Japan and Europe, licensed by Health Canada, and has been used safely and effectively with over 360,000 units sold worldwide to date. In March 2009, Spectral obtained the exclusive development and commercial rights in the U.S. for PMX, and in November 2010, signed an exclusive distribution agreement for this product in Canada. In July 2022, the U.S. FDA granted Breakthrough Device Designation for PMX for the treatment of endotoxic septic shock. Approximately 330,000 patients are diagnosed with septic shock in North America each year.
Spectral is listed on the Toronto Stock Exchange under the symbol EDT. For more information, please visit www.spectraldx.com.
Forward-Looking Information Cautionary 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 completion of the second tranche of the Offering, 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, the Company’s ability to satisfactorily address the items identified in FDA’s deficiency letter and the timing thereof, 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 news release.
For further information, please contact:
Ali Mahdavi
Capital Markets & Investor Relations
Spinnaker Capital Markets Inc.
416-962-3300
am@spinnakercmi.com
Chris Seto
CEO
Spectral Medical Inc.
cseto@spectraldx.com
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