Dallas-Based Spectral MD to List on Nasdaq Via SPAC Merger, Operate as Spectral AI

Spectral MD Holdings, founded over a decade ago, is a predictive analytics company focused on wound care treatment. It plans to delist from the AIM market and list on Nasdaq via a SPAC merger, operating as Spectral AI. The company’s AI-enabled FDA Breakthrough Designated DeepView platform uses AI algorithms and "difficult-to-duplicate" imaging technology to provide healing assessments.

Spectral MD Holdings, a medical diagnostic solutions company focused on artificial intelligence, announced it plans to be listed on Nasdaq through a business combination with Rosecliff Acquisition Corp I.

The combined company is expected to operate under the name Spectral AI and be listed under the symbol MDAI.

According to the CEO of Spectral MD, Wensheng Fan, the transaction is an “excellent strategic move” for the Dallas-based company founded in 2009. 

“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,” Fan said in a statement.

The company’s use of AI technology addresses an “unmet need” in the healthcare industry that goes beyond current solutions, the CEO said, adding that Spectral MD’s technology can offer improved diagnostic accuracy for healthcare providers, better patient outcomes, and “significantly” lower costs.

Valuation estimated at $170M

The proposed transaction values Spectral MD at an estimated $170 million and is expected to be completed in Q3 this year, subject to customary closing conditions.

The business combination with Rosecliff Acquisition Corp I would allow Spectral MD to be listed on Nasdaq and provide improved access to new sources of capital.

According to the company, the net proceeds from the proposed transaction will be used to speed up Spectral MD’s preparation for potential federal contracts and expand its commercialization efforts in the US, EU, and UK markets. This includes developing products for burn and diabetic foot ulcer indications, 3-D wound size measurement, digital wound assessment, and accelerating the development of other clinical applications in the company’s pipeline.

“I am excited to be working with the Rosecliff team in executing our vision of transforming patient care and improving clinical outcomes,” Fan said.

Spectral MD plans to delist from the AIM market of the London Stock Exchange as part of the proposed transaction and shift to Nasdaq through the SPAC merger, pending shareholder approval. 

According to the release, the transaction values are a premium to Spectral MD’s current AIM share price.

FDA Breakthrough Device Designation

Spectral MD burn

Spectral MD’s DeepView system looks beneath the skin’s surface. The company said that the AI technology behind the platform is trained and tested against a growing proprietary and clinically validated database of 263 billion data points only available to DeepView users. . [Photo: Spectral MD video]

Spectral MD’s DeepView platform uses proprietary algorithms to predict wound healing and assess whether a wound will heal to inform healthcare providers of next-step treatment protocols and has been designated as a Breakthrough Device by the U.S. Food and Drug Administration due to its potential to provide more effective treatment or diagnosis of life-threatening or irreversibly debilitating diseases or conditions.

More than $125M in government contracts  

Spectral MD is optimistic about securing a substantial federal procurement contract in the US for the commercialization of DeepView, as the company has already received non-dilutive contracts worth over $125 million from the US government.

These contracts were awarded through federal mass casualty countermeasure programs to develop DeepView for the assessment and healing of burns and provide a strong foundation for the development of additional pipeline clinical applications, the company noted.

Leadership team

Spectral MD said its experienced leadership team, which has significant medical, artificial intelligence, data analytics, and manufacturing experience, is a strong foundation for governmental and commercial success.

In November, Spectral MD appointed tech veteran Niko Pagoulatos as COO. Pagoulatos, who has more than two decades of experience in specialized medical ultrasound imaging, is responsible for accelerating the company’s growth and operational performance, reporting to Fan. As COO, he’ll focus on scientific research, engineering, and product development to bring Spectral MD’s products to the global market.

In a statement, Rosecliff CEO Mike Murphy expressed his confidence in Spectral MD CEO Fan and his team. Murphy also highlighted the company’s extensive pipeline of AI-platform indications, which he anticipates will bring additional benefits to patients and create value for investors.

‘Difficult-to-duplicate’ technology

“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,” Murphy said, calling the company’s predictive analytics technology “difficult-to-duplicate.”

Murphy said that Rosecliff believes the near-term and long-term prospects for Spectral MD are exceptional.

“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,” Murphy said.

In 2019, we told you about how Spectral MD received $27 million from the Biomedical Advanced Research and Development Authority for an expanded proof-of-concept clinical trial of the Deepview system.

Quincy Preston contributed to this story.

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