Spectral AI(MDAI) - 2023 Q4 - Annual Results

Overview and Business Highlights CEO's Statement & Outlook CEO highlights transition to commercialization, expecting DeepView System revenue in H2 2024, focusing on government contracts and regulatory approvals - The company expects to generate its first commercial product revenue in H2 2024[2] - The strategic goal is to generate commercial revenue from four DeepView System platforms for burn and DFU indications within the next three years[2] - Key regulatory milestones for 2024 include DFU indication filings in the US and UK, with US burn indication submission planned for H1 2025[3] 2023-2024 Select Business Highlights Spectral AI secured its largest government contract for DeepView System, achieved UKCA Authorization for UK sales in H2 2024, and strengthened its financial position - Awarded the largest contract in company history from the US Government, valued at up to $150.0 million, for the DeepView System for burn, including an initial $54.9 million award[4] - Received UKCA Authorization in February 2024, enabling DeepView System sales for burn in the UK, with first commercial revenues expected in H2 2024[5] - Initiated a pivotal study in December 2023 to validate the DeepView System for burn, expected to be the final clinical trial before seeking FDA approval[9] - Successfully listed on Nasdaq in September 2023 and enhanced access to capital through equity financing and a standby equity purchase agreement[9] Financial Performance Financial Results Summary For FY2023, R&D revenue decreased to $18.1 million, while increased G&A expenses and $8.3 million in transaction costs resulted in a net loss of $(20.9) million Full Year (FY) 2023 vs 2022 Financials (in millions) | Metric | FY 2023 | FY 2022 | | :--- | :--- | :--- | | R&D Revenue | $18.1 | $25.4 | | Gross Margin | 43.6% | 42.7% | | General & Admin Expense | $20.9 | $13.5 | | Net Loss | $(20.9) | $(2.9) | | Net Loss Per Share | $(1.48) | $(0.22) | Fourth Quarter (Q4) 2023 vs 2022 Financials (in millions) | Metric | Q4 2023 | Q4 2022 | | :--- | :--- | :--- | | R&D Revenue | $5.3 | $6.1 | | Gross Margin | 46.1% | 41.1% | | General & Admin Expense | $5.4 | $4.3 | | Net Loss | $(3.5) | $(1.7) | | Net Loss Per Share | $(0.22) | $(0.13) | - The FY 2023 net loss included $8.3 million of non-recurring transaction costs from the business combination and Nasdaq listing[15] Cash and 2024 Guidance The company ended 2023 with $4.8 million in cash, strengthened its financial position in Q1 2024, and reiterated FY2024 revenue guidance of approximately $28.0 million - As of December 31, 2023, the company had $4.8 million in cash and no long-term debt[16] - In Q1 2024, the company enhanced its financial position by receiving $5.0 million from a prepaid advance and SEPA, and approximately $2.8 million from a committed equity facility[16] - The company reiterates its FY 2024 revenue guidance of approximately $28.0 million, excluding expected contributions from UK DeepView System sales[1][17] Financial Statements Condensed Consolidated Balance Sheets As of December 31, 2023, total assets decreased to $10.7 million, total liabilities increased to $12.4 million, resulting in a stockholders' deficit of $(1.7) million Balance Sheet Summary (in thousands) | Account | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash | $4,790 | $14,174 | | Total Current Assets | $9,902 | $17,687 | | Total Assets | $10,692 | $18,716 | | Total Current Liabilities | $12,401 | $6,374 | | Total Liabilities | $12,401 | $6,720 | | Total Stockholders' Equity (Deficit) | $(1,709) | $11,996 | Condensed Consolidated Statements of Operations For FY2023, R&D revenue decreased to $18.1 million, operating loss widened to $(13.0) million, and $8.3 million in transaction costs led to a net loss of $(20.9) million Statement of Operations Highlights - Full Year (in thousands) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Research and development revenue | $18,056 | $25,368 | | Gross profit | $7,880 | $10,837 | | Operating loss | $(12,984) | $(2,647) | | Transaction costs | $(8,342) | $0 | | Net loss | $(20,854) | $(2,912) | | Net loss per share (Basic & Diluted) | $(1.48) | $(0.22) | Condensed Consolidated Statements of Cash Flows For FY2023, net cash used in operating activities increased to $(13.2) million, while financing activities provided $3.8 million, resulting in a net decrease in cash of $(9.4) million, ending with $4.8 million Cash Flow Summary - Full Year (in thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(13,240) | $(1,162) | | Net cash provided by (used in) financing activities | $3,844 | $(785) | | Net decrease in cash | $(9,384) | $(1,947) | | Cash, end of period | $4,790 | $14,174 |