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Spectral Diagnostics Inc
Symbol SDI
Shares Issued 134,462,617
Close 2014-07-24 C$ 0.395
Market Cap C$ 53,112,734
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Spectral Diagnostics closes tranche A for $13.2-million

2014-07-25 09:38 ET - News Release

Mr. Anthony Businskas reports

SPECTRAL DIAGNOSTICS AND TORAY INDUSTRIES ANNOUNCE CLOSING OF TRANCHE "A" COMPONENT OF ITS UP TO $18.2 MILLION OFFERING

Spectral Diagnostics Inc. and Toray Industries Inc. have closed tranche A of the previously announced non-brokered private placement of the corporation. The tranche A component of the offering comprised 45,051,186 common shares of the corporation at a subscription price of 29.3 cents per share for aggregate proceeds of $13.2-million. The offering was approved by shareholders of the corporation at a special meeting of shareholders held on July 22, 2014.

"With the closing of this financing and a clear clinical development pathway, we can now confidently move forward to complete the Euphrates trial and plan for commercialization of our unique treatment for septic shock in the North American market," said Anthony Businskas, executive vice-president and chief financial officer of Spectral.

"We have had a long and collaborative relationship with Spectral and are pleased to have participated in this offering," stated Ryo Murayama, senior vice-president of Toray.

"We expect to continue our support of this very important initiative and intend to work with Spectral to build acceptance and usage of the combined EAA/PMX approach for the treatment of septic shock," added Mr. Murayama.

Among other insiders, Toray participated in tranche A of the offering and acquired 17,064,846 shares, at a subscription price of 29.3 cents per share, for aggregate proceeds of $5-million. As a consequence, Toray now holds 33,731,513 shares or 18.8 per cent of the issued and outstanding shares, calculated on a non-diluted basis.

The tranche B component of the offering comprises additional shares to be sold to Toray by the corporation of up to $5-million, if, as and when the corporation exercises the right, granted by Toray to the corporation in the private placement agreement between the corporation and Toray dated June 10, 2014, which is exercisable by written notice given by the corporation to Toray at any time on or after March 1, 2015, until March 15, 2015, to require Toray to purchase from the corporation, at a subsequent closing to occur on April 1, 2015, up to that number of shares as is determined by dividing the call right amount exercised (up to the $5-million), as applicable, by the volume-weighted average trading price of the shares on the Toronto Stock Exchange for the 20 trading days ending on the business day prior to the day the call right is exercised. The shares to be sold to Toray in tranche B will only be sold if the corporation exercises the call right.

The corporation intends to use the net proceeds of the offering to finance its Euphrates clinical development program for PMX, its lead theranostics product for the treatment of severe sepsis with septic shock, and for working capital and general corporate purposes.

We seek Safe Harbor.

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