Spectral Medical closes first tranche of $14M convertible note offering

Spectral Medical Inc. (TSX: EDT) has closed the first tranche of a $14.0 million convertible unsecured note private placement, issuing $7.7 million in notes on Oct. 30, 2026, according to a company statement.

The notes, referred to as 2026 Notes, mature on Nov. 1, 2031, and bear interest at the Canadian Overnight Repo Rate Average plus 800 basis points per annum, payable semi-annually. Holders may convert the notes into units at $1.00 per unit, with each unit comprising one common share and one-half of one common share purchase warrant exercisable at $1.10 until maturity.

A second tranche of $6.3 million in 2026 Notes is expected to close on or about Nov. 6, 2026, subject to customary closing conditions. The maximum aggregate principal amount outstanding at maturity, including paid-in-kind interest, is capped at $28.0 million.

Concurrent with the offering, the company addressed US$9.0 million in maturing convertible notes. One holder converted US$2.5 million of 2022 Notes and US$2.0 million of 2023 Notes into 13,870,397 common shares. Vantive US Healthcare LLC, which held the remaining US$2.5 million of 2022 Notes and US$2.0 million of 2023 Notes, did not convert, and the company repaid that US$4.5 million principal plus accrued interest.

Spectral intends to use proceeds from the offering to fund the repayment of the unconverted notes and for general corporate and working capital purposes.

Paradigm Capital Inc. acted as financial advisor on the offering, receiving a cash commission of $192,500, $192,500 in principal amount of 2026 Notes, and 385,000 compensation options on the first tranche closing. The 2026 Notes issued in the first tranche were purchased by Pinnacle Island II LP and Paradigm Capital Inc. Pinnacle II will be entitled to designate a non-voting board observer for as long as any 2026 Notes remain outstanding.

Toronto-based Spectral Medical is pursuing U.S. FDA approval for Toraymyxin, a hemoperfusion device for the treatment of septic shock patients.

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