Spectral Medical is a stock to buy now, this analyst says
Paradigm Capital analyst Scott McAuley said in an Aug. 25 note that Spectral Medical (Spectral Medical Stock Quote, Chart, News, Analysts, Financials TSX:EDT) is undergoing “a fundamental re-rating of the stock, making for an immediately actionable entry point for investors.”
The company announced it has received a US$3-million payment under its promissory note agreement with Vantive, triggered by the positive TIGRIS trial results released on Aug. 12.
“Positive, although expected,” McAuley said. “This payment was triggered by the positive results of the TIGRIS trial that were announced on August 12. The full US$10-million note is designed to fund the company through to the FDA submission and approval and this payment tranche should help alleviate any concerns of a financing overhang.”
McAuley noted the payment was anticipated, given Vantive’s role in jointly releasing the topline trial results. However, he said it was still positive to see the cash received and added to the balance sheet.
The US$10-million promissory note is structured in tranches, with Vantive having paid US$7-million to date. The first US$4-million was paid at signing, the US$3-million tranche was due on the trial data readout, a third tranche depends on the number of warrants exercised by early November (about $2.5-million at $0.48 and $0.40 per share), and the final tranche is due upon FDA receipt of Spectral’s PMA submission for PMX.
McAuley emphasized the note’s “company-friendly” terms, which he said highlight Vantive’s commitment to PMX. The note carries a four-year maturity with payment-in-kind interest at 9% annually, with both principal and interest due at maturity. It is not convertible into equity. He added that Vantive has previously invested in PMX through upfront and milestone fees under its commercial agreement, as well as through a prior convertible debenture financing.
“The additional US$10-million increases the investment that Vantive has made in PMX and highlights its commitment and interest in the product,” he said. “Recall that PMX can be used with Vantive’s PrisMax CRRT system and would provide a natural high-margin value add to that Acute Care product line.”
With the latest payment received, McAuley said Spectral can now focus on its FDA submission, which he expects by the end of October, and on submitting the full TIGRIS trial analysis for publication in a leading medical journal by early 2026.
-30-
Rod Weatherbie
Writer
Rod Weatherbie is a journalist based in Prince Edward Island. Since 2004, he has written extensively about the Canadian property and casualty insurance landscape. He was also a founder and contributing editor for a Toronto-based arts website and a PEI-based food magazine. His fiction and poetry have been featured in The Fiddlehead, The Antigonish Review, and Juniper.