Mr. Chris Seto reports

SPECTRAL MEDICAL INC. CLOSES C$6.1 MILLION BOUGHT DEAL CONVERTIBLE NOTE FINANCING

Spectral Medical Inc. has closed its previously announced bought-deal private placement of 9 per cent convertible unsecured senior notes due Nov. 1, 2026, of the company at a price of $1,000 (U.S.) per note for aggregate gross proceeds of $4,553,000 (U.S.). The offering was conducted by Paradigm Capital Inc. (the underwriter) and consisted of the sale of 4,553 notes at a price of $1,000 (U.S.) per note.

The notes have a face value of $1,000 (U.S.) per note, bear interest of 9 per cent and are due on Nov. 1, 2026. Holders of the notes may convert all or any portion of the notes into common shares of the company in integral multiples of $1,000 (U.S.) principal amount at any time prior to the maturity date. The notes are convertible into approximately 15,475,647 common shares, subject to customary anti-dilution and make-whole fundamental change adjustments. Pursuant to the note offering, Baxter International Inc. agreed to purchase certain of the notes in connection with an amendment to a portion of the last milestone payment due to the company under the distribution agreement (as defined below). In 2020, Baxter, a leading global medical products company, entered into a distribution agreement with the company for PMX (as defined below) and the Endotoxin Activity Assay (EAA), an on-market companion diagnostic tool that aids in the risk assessment of ICU (intensive care unit) patients for progression to severe sepsis.

In connection with the offering, the underwriter received a cash commission of $273,180 (U.S.) and 928,539 compensation options, with each compensation option entitling the holder thereof to acquire one common share at an exercise price equal to 40 cents until the date that is three years following today's date. The company intends to use the net proceeds from the offering for its phase 3 registration trial (Tigris study) for its PMX product treatment for endotoxic septic shock, and for general corporate and working capital purposes.

Chris Seto, chief executive officer of Spectral Medical, stated: "We remain encouraged by the continued momentum and pace of patient enrolment in the Tigris study. We are now at 72 patients enrolled, and the study remains on track to reach the important interim milestone of 90 patients enrolled by the end of 2023. I would like to thank our strategic investors, Baxter and Pinnacle Island LP. Our investment partners understand and are aligned with the company's strategy, and I am pleased with their continued funding support to advance our pivotal Tigris trial."

About Spectral Medical Inc.

Spectral is a phase 3 company seeking U.S. Food and Drug Administration (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 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.