Spectral AI announces plan to spin off Spectral IP subsidiary

Spectral AI (MDAI) announced its intent to spin off its Spectral IP, Inc. subsidiary through a transaction with Sauvegarder Investment Management, a development-stage company focused on IP-based financing and monetization. The spinoff aligns with Spectral AI’s strategy to maximize shareholder value by fostering growth in its subsidiary, Spectral IP, to monetize intellectual property assets relevant to the broader AI ecosystem with a specific emphasis on healthcare that present significant growth potential outside of the Company’s core focus on medical diagnostics. All of Spectral AI’s 26 patents and 38 patent applications will remain with Spectral AI. The spinoff is expected to deliver key advantages, including: a sharper strategic focus with supporting resources; optimized capital allocation priorities; enhanced shareholder value; and expanded strategic opportunities for Spectral IP. Spectral AI anticipates that the transaction will be in the form of a distribution to its shareholders of stock of Spectral IP, which will become a new, independent publicly-traded company. Spectral AI currently expects the transaction to be completed within the next 90 days, subject to final approval by the Company’s Board of Directors, a Form 10 registration statement being declared effective by the U.S. Securities and Exchange Commission, regulatory approvals, and the satisfaction of any remaining closing conditions. There can be no assurance regarding the ultimate timing or completion of the proposed spin off transaction. In March 2024, Spectral AI announced the formation of its Spectral IP subsidiary to advance intellectual property relevant to the broader AI ecosystem, with a specific emphasis on healthcare. Spectral AI also announced that Spectral IP had received a $1 million investment and that Board Member Erich Spangenberg was appointed Chief Executive Officer of the subsidiary. Mr. Spangenberg is Spectral AI’s largest shareholder and has a strong track record in global IP investment, monetization, enforcement, acquisition, and licensing. Following the spinoff, Spectral IP will focus on providing IP-based financing and monetization solutions across various industries. SIM IP’s approach will include licensing, litigation investment, structured financing, royalty acquisitions, and opportunistic transactions. While SIM IP will remain industry-agnostic, its target sectors include healthcare, semiconductors, AI, and IoT – “hard tech” sectors with longer replacement cycles commonly ignored by other investors and frequently infringed. Led by experienced professionals, it intends to leverage deep industry connections and expertise to identify and unlock value in IP assets. SIM IP will be led by Mr. Spangenberg as Chief Executive Officer and David Kutcher as Chief Financial Officer following the completion of the separation. SIM IP will be headquartered in Miami, Florida.