Mr. Blair McInnis reports

SPECTRAL MEDICAL INC. ANNOUNCES C$5 MILLION BOUGHT DEAL CONVERTIBLE NOTE FINANCING

Spectral Medical Inc. has entered into an agreement with Paradigm Capital Inc., in connection with a bought deal private placement of convertible notes for gross proceeds of approximately $5-million, consisting of the sale of 9 per cent convertible notes of the company at a price of $1,000 (U.S.) per convertible note.

The company has granted to the underwriter an option to sell up to that number of additional notes equal to 15 per cent of the base offering size, on the same terms and conditions as set out herein, exercisable in whole or in part at any time 48 hours prior to the closing date (as defined herein).

The net proceeds from the offering are expected to be primarily used by the company on its phase 3 registration trial (Tigris) for its PMX treatment for endotoxemic septic shock, and for general corporate and working capital purposes.

The offering is expected to close on or about Aug. 30, 2023, and will be subject to regulatory approvals and customary closing conditions, including the listing of the common shares issuable upon conversion of the notes on the Toronto Stock Exchange.

About Spectral Medical Inc.

Spectral is a phase 3 company seeking United States Food and Drug Administration approval for its unique product for the treatment of patients with septic shock, Toraymyxin. PMX is a therapeutic hemoperfusion device that removes endotoxin, which can cause sepsis, from the bloodstream and is guided by the company's Endotoxin Activity Assay (EAA), the only FDA-cleared diagnostic for the risk of developing sepsis.

PMX is approved for therapeutic use in Japan and Europe, and has been used safely and effectively on more than 340,000 patients to date. In March, 2009, Spectral obtained the exclusive development and commercial rights in the United States 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 endotoxemic septic shock. Approximately 330,000 patients are diagnosed with septic shock in North America each year.

We seek Safe Harbor.