- Spectral MD is an Artificial Intelligence (AI) company focused
on predictive medical diagnostics. The Company’s FDA Breakthrough
Designated DeepView AI Wound Diagnostics platform (“DeepView”) uses
proprietary algorithms to predict wound healing
- The proposed Transaction values Spectral MD at an estimated
enterprise value of $170 million, equivalent to approximately 101p
per share, a significant premium to Spectral MD’s current AIM share
price. All valuations included in this press release assume that
there are no redemptions in the Transaction
- Net proceeds of the proposed Transaction (as defined below)
will be used to accelerate readiness for material potential federal
contracts, to enhance Spectral MD’s efforts for broad
commercialization opportunities in the U.S., EU and U.K., including
both burn and diabetic foot ulcer (DFU) indications, 3-D wound size
measurement, digital wound assessment, and to accelerate the
development of additional pipeline clinical applications
- Spectral MD believes there will be a significant U.S. federal
procurement contract for the commercialization of DeepView, having
previously been awarded over $125 million of non-dilutive contracts
from the U.S. government through federal mass casualty
countermeasure programs to develop DeepView for the healing
assessment of burns
- The proposed Transaction is expected to be completed in Q3
2023, subject to, among other things, the approval by Rosecliff
stockholders and Spectral MD shareholders and the satisfaction or
waiver of other customary closing conditions
Spectral MD Holdings, Ltd. (AIM: SMD), an AI company focused on
medical diagnostics for faster and more accurate treatment
decisions in wound care, announces it has entered into a business
combination agreement to combine (the “Transaction”) with Rosecliff
Acquisition Corp I (“Rosecliff”, Nasdaq: RCLF), a special purpose
acquisition company listed on Nasdaq (the “Combined Company”). Upon
completion of the Transaction, the Combined Company expects to
operate under the expected name Spectral AI and to be listed on
Nasdaq under the symbol MDAI. Following the completion of the
proposed transaction, the Combined Company will operate under the
same management team, led by founder and Chief Executive Officer
Wensheng Fan with current Spectral MD shareholders rolling 100% of
their equity into the Transaction.
The proposed Transaction is expected to provide the Combined
Company with improved access to new sources of capital, accelerate
readiness for material potential U.S. federal procurement
contracts, and enhance company efforts for broad commercialization
opportunities of its AI Wound Diagnostics Technology in the U.S.,
EU and U.K., including both burn and DFU indications, 3-D wound
measurement, and digital wound assessment.
Wensheng Fan, Chief Executive Officer of Spectral MD,
said: “This transaction is an excellent strategic move for
Spectral MD. For the past 10 years, the Spectral MD team and our
key partners have been developing cutting edge AI solutions that
have demonstrated tremendous promise and are now on the cusp of
delivering for healthcare providers and patients. Spectral MD
solves an unmet need in healthcare that goes far beyond current
solutions by leveraging relevant AI technology to enhance the
diagnostic accuracy of the healthcare provider, improve patient
outcomes and significantly lower costs. The Nasdaq listing will
ensure we are well positioned to capitalize on U.S. federal
procurement contracts, our planned FDA and CE mark submissions in
2023 and 2024, and our commercialization roadmap for burn, DFU, 3-D
wound size measurement, as well as support the advancement of
additional pipeline clinical applications. I am excited to be
working with the Rosecliff team in executing our vision of
transforming patient care and improving clinical outcomes.”
Mike Murphy, Chief Executive Officer of Rosecliff, said:
“Great companies and great opportunities transcend current market
conditions. The Rosecliff team has done its work and we believe
Spectral MD to be a leading AI-driven and disruptive healthcare
platform. We believe that Wensheng and his team have developed
difficult-to-duplicate predictive analytics technology designed to
transform treatment protocols, drive superior results for wound
care management, and lower healthcare costs, all while managing a
deep pipeline of additional AI-platform indications focused on
delivering further benefits to consumers and value for investors.
Rosecliff believes the near-term and long-term prospects for
Spectral MD are exceptional and we are excited to be partnering
with Spectral MD and provide the company with a new source of
capital, and increased exposure, to ensure it can deliver on its
growth, regulatory and commercialization initiatives.”
Spectral MD Highlights
- Proprietary AI Wound Diagnostics Platform: Spectral MD
with its AI enabled FDA Breakthrough Designated DeepView platform,
uses proprietary AI to assess if a wound will heal to better inform
healthcare providers on next-step treatment protocols
- Significant U.S. Government Support: The Company has
received over $125 million of non-dilutive government contracts
from multiple federal agencies to develop its DeepView AI Wound
Diagnostics Technology for burn wound healing assessment, including
under the U.S. federal mass casualty countermeasures program,
providing a strong foundation for the development of additional
pipeline clinical applications
- Substantial Pipeline of Clinical Applications: Initially
targeting burn wounds, DFU, and 3-D wound size measurement,
DeepView has an extensive pipeline of potential clinical
applications in AI-driven digital wound assessment. This includes
venous leg ulcer, critical limb ischemia, amputation, cosmetics,
and other digitally guided therapeutic opportunities
- Significant Barriers to Entry: Spectral MD’s AI model is
trained and tested against a growing proprietary and clinically
validated database of 263 billion data points only available to
DeepView users, developed over more than eight years of clinical
studies across the U.S. and Europe. The Company believes this is a
significant barrier to entry for potential competitors and reflects
the depth and utility of the Company’s IP portfolio
- Experienced Proven Leadership: Spectral MD is led by
founder and CEO Wensheng Fan, along with a leadership team with
significant medical, artificial intelligence, data analytics and
manufacturing experience, providing a strong foundation for
governmental and commercial success
- Commercialization Potential: Spectral MD is nearing
commercialization for DeepViewÒ with planned FDA, CE and UKCA
submissions for burn and DFU indications. Submission for UKCA Mark
is anticipated for burn in 2023 and DFU in 2024, submission for
U.S. FDA is expected for DFU in 2024 and burn in 2025, and
submission for CE Mark for EU is expected for DFU in 2024 and burn
in 2025. The Company responded to a U.S. Federal Sources Sought
Notice in February 2023 regarding a material potential U.S. federal
procurement contract for the burn indication.
Transaction Overview
- The proposed Transaction is expected to deliver gross proceeds
to Spectral MD in excess of $20 million (assuming no redemptions).
This includes approximately $4.5 million held in Rosecliff’s trust
(assuming no redemptions) and an expected private placement
investment of no less than $15 million. The Transaction is not
subject to any minimum cash condition and neither (a) minimum cash
in trust or (b) any minimum PIPE financing is a condition to
closing
- The proposed Transaction values Spectral MD at an estimated
enterprise value of $170 million, equivalent to approximately 101p
per share on the AIM market (assuming no redemptions)
- The proposed Transaction was unanimously approved by the boards
of directors of both parties and is supported by irrevocable
proxies and voting agreements of existing shareholders of Spectral
MD holding greater than 50% of the outstanding shares
- The proposed Transaction is expected to be completed in Q3
2023, subject to, among other things, the approval by Rosecliff
stockholders and Spectral MD shareholders and the satisfaction or
waiver of other customary closing conditions. The newly listed
entity Spectral AI will maintain its headquarters at the current
office of Spectral MD in Dallas, Texas along with current
operations in the U.K. and clinical testing in the U.K. and EU
- As part of the proposed Transaction, Spectral MD intends to
cancel the admission of its common stock to trading on the AIM
market of the London Stock Exchange (the “Delisting”), subject to
shareholder approval. Following the Delisting, all public trading
of securities of the Company are expected to take place on
Nasdaq
- Rosecliff’s current stockholders currently hold 8.4 million
warrants, exercisable at $11.50 per share, which could provide up
to an additional $97 million of cash to the Company depending on
the Company’s stock price following closing of the Transaction
- Certain of Rosecliff’s expenses relating to the Transaction are
capped at $3.25 million
Whereas the Company’s board of directors (the “Spectral Board”)
is confident the proposed Transaction will be consummated on a
timely basis, there can be no assurances that the proposed
Transaction will be completed on the expected timeframe or at all
and there can be no certainty in this regard.
Spectral MD Advisors
Reed Smith LLP is serving as a legal advisor to Spectral MD.
S.P. Angel Corporate Finance LLP is acting as nominated adviser and
broker in connection with the Transaction.
Rosecliff Advisors
Skadden, Arps, Slate, Meagher & Flom LLP is serving as a
legal advisor to Rosecliff.
About Spectral MD
Spectral MD is a predictive AI company focused on medical
diagnostics for faster and more accurate treatment decisions in
wound care for burn, DFU, and future clinical applications. At
Spectral MD, we are a dedicated team of forward-thinkers striving
to revolutionize the management of wound care by “Seeing the
Unknown”® with our DeepView® Wound Diagnostics System. The
Company’s DeepView® platform is the only predictive diagnostic
device that offers clinicians an objective and immediate assessment
of a wound’s healing potential prior to treatment or other medical
intervention. With algorithm-driven results that substantially
exceed the current standard of care, Spectral MD’s diagnostic
platform is expected to provide faster and more accurate treatment
insight, significantly improving patient care and clinical
outcomes. For more information, visit the Company at:
www.spectralmd.com
About Rosecliff Acquisition Corp
I
Rosecliff is a blank check company formed for the purpose of
effecting a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination with
one or more businesses. Its principals possess public and private
market investing experience and operational knowledge to bring
value added benefits to Spectral MD. The Rosecliff team has
substantial experience investing in rapidly growing and disruptive
technologies across the financial, consumer, healthcare and
software industries, as well as a long-term track record in
creatively structuring transactions to unlock and maximize
value.
Additional Information and Where to
Find It
This press release is provided for informational purposes only
and contains information with respect to a proposed business
combination among Spectral MD, Rosecliff, Ghost Merger Sub I Inc.,
a wholly-owned subsidiary of Rosecliff, and Ghost Merger Sub II
LLC, a wholly-owned subsidiary of Rosecliff. In connection with the
proposed Transaction, Rosecliff intends to file with the U.S.
Securities and Exchange Commission (the "SEC") a registration
statement on Form S-4, which will include a proxy statement to be
sent to Rosecliff stockholders and a prospectus for the
registration of Rosecliff securities in connection with the
proposed Transaction (as amended from time to time, the
“Registration Statement”). A full description of the proposed
Transaction is expected to be provided in the Registration
Statement filed by Rosecliff with the SEC. Rosecliff's
stockholders, investors and other interested persons are advised to
read, when available, the Registration Statement as well as other
documents filed with the SEC, as these documents will contain
important information about Rosecliff, Spectral MD, and the
proposed Transaction. If and when the Registration Statement is
declared effective by the SEC, the proxy statement/prospectus and
other relevant documents for the proposed Transaction will be
mailed to stockholders of Rosecliff as of a record date to be
established for voting on the proposed Transaction. Rosecliff
investors and stockholders will also be able to obtain copies of
the proxy statement/prospectus and other documents filed with the
SEC, without charge, once available, at the SEC's website at
www.sec.gov.
Participants in the
Solicitation
Rosecliff, Spectral MD and certain of their respective
directors, executive officers, other members of management and
employees may, under SEC rules, be deemed participants in the
solicitation of proxies from Rosecliff's stockholders with respect
to the proposed Transaction. Investors and security holders may
obtain more detailed information regarding the names and interests
in the proposed Transaction of Rosecliff's directors and officers
in Rosecliff's filings with the SEC, including, when filed with the
SEC, the preliminary proxy statement and the amendments thereto,
the definitive proxy statement, and other documents filed with the
SEC. Such information with respect to Spectral MD’s directors and
executive officers will also be included in the proxy
statement.
No Offer or Solicitation
This press release and the information contained herein do not
constitute (i) (a) a solicitation of a proxy, consent or
authorization with respect to any securities or in respect of the
proposed Transaction or (b) an offer to sell or the solicitation of
an offer to buy any security, commodity or instrument or related
derivative, nor shall there be any sale of securities in any
jurisdiction in which the offer, solicitation or sale would be
unlawful prior to the registration or qualification under the
securities laws of any such jurisdiction or (ii) an offer or
commitment to lend, syndicate or arrange a financing, underwrite or
purchase or act as an agent or advisor or in any other capacity
with respect to any transaction, or commit capital, or to
participate in any trading strategies. No offer of securities in
the United States or to or for the account or benefit of U.S.
persons (as defined in Regulation S under the U.S. Securities Act)
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act, or an exemption
therefrom. Investors should consult with their counsel as to the
applicable requirements for a purchaser to avail itself of any
exemption under the Securities Act.
Forward Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. This includes, without limitation, all statements regarding
(i) the proposed Transaction, including statements regarding
anticipated timing of the proposed Transaction, (ii) redemptions,
(iii) valuation of the proposed Transaction, (iv) the closing of
the proposed Transaction, (v) the ability to regain compliance with
Nasdaq Capital Market listing requirements and to maintain listing,
or for the Combined Company to be listed, on the Nasdaq Capital
Market, (vi) Rosecliff and Spectral MD’s managements’ expectations
and expected synergies of the proposed Transaction and the Combined
Company, (vii) the use of proceeds from the proposed Transaction,
(viii) potential government contracts, and (ix) expected beneficial
outcomes and synergies of the proposed Transaction. Generally,
statements that are not historical facts, including statements
concerning our possible or assumed future actions, business
strategies, events or results of operations, are forward-looking
statements. These statements may be preceded by, followed by or
include the words “believes,” “estimates,” “expects,” “projects,”
“forecasts,” “may,” “will,” “should,” “seeks,” “plans,”
“scheduled,” “anticipates” or “intends” or similar expressions.
Such forward-looking statements involve risks and uncertainties
that may cause actual events, results or performance to differ
materially from those indicated by such statements. These
forward-looking statements are expressed in good faith, and
Rosecliff and Spectral MD believe there is a reasonable basis for
them. However, there can be no assurance that the events, results
or trends identified in these forward-looking statements will occur
or be achieved. Forward-looking statements speak only as of the
date they are made, and neither Rosecliff nor Spectral MD is under
any obligation, and expressly disclaim any obligation, to update,
alter or otherwise revise any forward-looking statement, whether as
a result of new information, future events or otherwise, except as
required by law.
Forward-looking statements are inherently subject to risks,
uncertainties and assumptions. In addition to risk factors
previously disclosed in Rosecliff’s reports filed with the SEC and
those identified elsewhere in this press release, the following
factors, among others, could cause actual results to differ
materially from forward-looking statements or historical
performance: (i) expectations regarding Spectral MD’s strategies
and future financial performance, including its future business
plans or objectives, prospective performance and opportunities and
competitors, revenues, products and services, pricing, operating
expenses, market trends, liquidity, cash flows and uses of cash,
capital expenditures, and Spectral MD’s ability to invest in growth
initiatives and pursue acquisition opportunities; (ii) the risk
that the proposed Transaction may not be completed in a timely
manner at all, which may adversely affect the price of Rosecliff’s
securities; (iii) the failure to satisfy the conditions to the
consummation of the proposed Transaction, including the adoption of
the business combination agreement by the stockholders of Rosecliff
and the shareholders of Spectral MD, and the receipt of certain
governmental and regulatory approvals; (iv) the lack of third party
valuation in determining whether or not to pursue the proposed
Transaction; (v) the ability to regain compliance with Nasdaq
Capital Market listing requirements and to maintain listing, or for
the Combined Company to be listed, on the Nasdaq Capital Market;
(vi) the occurrence of any event, change or other circumstances
that could give rise to the termination of the business combination
agreement; (vii) the outcome of any legal proceedings that may be
instituted against Rosecliff or Spectral MD following announcement
of the proposed Transaction; (viii) the inability to complete the
proposed Transaction due to, among other things, the failure to
obtain Rosecliff stockholder approval on the expected terms and
schedule and the risk that regulatory approvals required for the
proposed Transaction are not obtained or are obtained subject to
conditions that are not anticipated; (ix) the risk that the
proposed Transaction may not be completed by Rosecliff’s business
combination deadline and the potential failure to obtain an
extension of the business combination deadline; (x) the effect of
the announcement or pendency of the proposed Transaction on
Spectral MD’s business relationships, operating results, and
business generally; (xi) volatility in the price of Rosecliff’s
securities due to a variety of factors, including changes in the
competitive and regulated industries in which Rosecliff plans to
operate or Spectral MD operates, variations in operating
performance across competitors, changes in laws and regulations
affecting Rosecliff's or Spectral MD’s business, Spectral MD’s
inability to implement its business plan or meet or exceed its
financial projections and changes in the combined capital
structure; (xii) Rosecliff’s ability to raise capital as needed;
(xiii) the ability to implement business plans, forecasts, and
other expectations after the completion of the proposed Transaction
and identify and realize additional opportunities; (xiv) the risk
that the announcement and consummation of the proposed Transaction
disrupts Spectral MD’s current operations and future plans; (xv)
the ability to recognize the anticipated benefits of the proposed
Transaction; (xvi) unexpected costs related to the proposed
Transaction; (xvii) the amount of any redemptions by existing
holders of the Rosecliff common stock being greater than expected;
(xviii) limited liquidity and trading of Rosecliff’s securities;
(xix) geopolitical risk and changes in applicable laws or
regulations; (xxi) the possibility that Rosecliff and/or Spectral
MD may be adversely affected by other economic, business, and/or
competitive factors; (xxii) operational risk; and (xxiii) changes
in general economic conditions, including as a result of the
COVID-19 pandemic. The foregoing list of factors is not exhaustive.
You should carefully consider the foregoing factors and the other
risks and uncertainties described in the “Risk Factors” sections of
the Rosecliff’s Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q, and the other documents filed by Rosecliff from time to
time with the SEC. These filings identify and address other
important risks and uncertainties that could cause actual events
and results to differ materially from those contained in the
forward-looking statements.
Any financial projections in this press release (including the
enterprise value being attributed to Spectral MD in the proposed
Transaction or the post-transaction enterprise value) are
forward-looking statements that are based on assumptions that are
inherently subject to significant uncertainties and contingencies,
many of which are beyond Rosecliff’s and Spectral MD’s control.
While all projections are necessarily speculative, Rosecliff and
Spectral MD believe that the preparation of prospective financial
information involves increasingly higher levels of uncertainty the
further out the projection extends from the date of preparation.
The assumptions and estimates underlying the projected results are
inherently uncertain and are subject to a wide variety of
significant business, economic and competitive risks and
uncertainties that could cause actual results to differ materially
from those contained in the projections. The inclusion of
projections in this communication should not be regarded as an
indication that Rosecliff and Spectral MD, or their
representatives, considered or consider the projections to be a
reliable prediction of future events. Annualized, pro forma,
projected and estimated numbers are used for illustrative purpose
only, are not forecasts and may not reflect actual results.
Readers are cautioned not to put undue reliance on
forward-looking statements, and neither Rosecliff nor Spectral MD
assumes any obligation and do not intend to update or revise these
forward-looking statements, whether as a result of new information,
future events, or otherwise, except as required by securities and
other applicable laws. Neither Rosecliff nor Spectral MC gives any
assurance that it will achieve its expectations.
Special Information for U.K.
Shareholders
Reasons for the AIM Delisting
The Company’s Board has resolved, subject to shareholder
approval, to implement the AIM Delisting for the following
reasons:
- Delisting from AIM would remove certain complexities and
duplication that comes with administering two listing regimes. For
example, by simplifying shareholder communications and compliance
with regulatory requirements and by reducing associated costs and
demand for internal resources.
- The Board expects that a Nasdaq-only listing will attract the
appropriate investor base and investment style, maximizing the
Company's ability to access deeper pools of capital and therefore
strengthens its position to accelerate the commercialization of its
AI Wound Diagnostics Technology via U.S. and European regulatory
approvals and a potential U.S. federal procurement contract.
- Existing AIM investors will be able to own, trade, and transfer
shares of the Combined Company following the Transaction.
Accordingly, the Board believes that it is in the best interests
of the Company and its shareholders as a whole to cancel the
admission of the Company's common stock to trading on AIM.
Effect of the AIM Delisting
If the Resolution is passed by the Company’s shareholders and
the Transaction is finalized, they will no longer be able to buy
and sell common stock on AIM after the Delisting.
Following the AIM Delisting taking effect, the Company will
comply with all regulatory requirements for the Nasdaq listing,
including all applicable rules and regulations of the SEC. The
Company will no longer be subject to the AIM Rules for Companies or
be required to retain the services of an independent nominated
adviser. The Company will also no longer be required to comply with
the continuing obligations set out in the Disclosure Guidance and
Transparency Rules (the "DTRs") of the Financial Conduct Authority
(the "FCA") or, provided the Company's securities remain outside
the scope of the regulation, U.K. MAR. In addition, the Company and
its shareholders will no longer be subject to the provisions of the
DTRs relating to the disclosure of changes in significant
shareholdings in the Company.
Information for Holders of Spectral MD Common Stock
Shareholders who continue to hold common stock following the
Delisting will continue to be notified in writing of the
availability of key documents on the Company's website, including
publication of annual reports and annual general meeting
documentation as well as obtaining additional information annual
reports and other periodic reports being available on the SEC
website www.sec.gov.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230410005338/en/
Spectral MD Holdings, Ltd. Vince Capone IR@spectralmd.com
SP Angel Corporate Finance LLP (NOMAD and Joint Broker for
Spectral MD) Stuart Gledhill / Harry Davies-Ball (Corporate
Finance) Vadim Alexandre / Rob Rees (Sales & Broking) Tel: +44
(0)20 3470 0470 The Equity Group Inc. (US Investor
Relations) Devin Sullivan dsullivan@equityny.com Tel:
212-836-9608 Walbrook PR Ltd (UK Media & Investor
Relations) Paul McManus / Louis Ashe-Jepson / Alice Woodings
spectralMD@walbrookpr.com Tel: +44 (0)20 7933 8780
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