/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES
OR FOR DISSEMINATION IN THE UNITED
STATES/
TORONTO, Feb. 9, 2022 /CNW/ - SQI Diagnostics Inc.
("SQI" or the "Company") (TSXV: SQD) (OTCQB: SQIDF),
a life sciences and diagnostics company that develops and
commercializes proprietary technologies and products for advanced
microarray diagnostics, is pleased to provide an update in respect
of its previously announced transaction with Precision
Biomonitoring Inc. ("PBI"), in accordance with the policies
of the TSXV Venture Exchange Inc. ("TSXV").
On January 10, 2022, the Company
announced that it had entered into a definitive agreement to
acquire, through its wholly-owned subsidiary, SQI Diagnostics
Systems Inc. ("SQI Systems"), substantially all of the
assets (the "Transaction") underlying PBI's human diagnostic
COVID-19 PCR testing business and its TripleLock™ molecular
diagnostic testing technology (together, the "Business") for
aggregate cash and share consideration of $6,825,000.
The Company advises that the TSXV has conditionally accepted the
Transaction, and the parties continue to advance towards closing of
the Transaction anticipated to be on or about February 14, 2022. Completion of the Transaction
remains subject to the satisfaction of all closing conditions.
The Company also advises that, in connection with the completion
of the Transaction, it has entered into a non-binding letter
agreement (the "Agreement") with Pivot Financial
("Pivot"), an arm's length third party, with respect to the
extension of a short-term senior secured demand credit facility in
the amount of $7,500,000 (the
"Credit Facility"), which amount is to be applied against
the cash portion of the Transaction purchase price, including
certain inventory purchase costs, with the remaining balance used
for working capital and general corporate purposes. It is expected
that certain insiders of the Company will participate as to 50% of
the Credit Facility amount together with Pivot (the "Insider
Lenders").
The Credit Facility will mature 2 months following the extension
of funds and will bear interest at 15% per annum. There is no
commission or bonus payable in connection with extension of the
Credit Facility, and the Credit Facility is not convertible into
any securities of the Company.
The Credit Facility will be secured by a first charge general
security interest over the Company, as borrower, and the
Company's wholly-owned subsidiary SQI Systems, as guarantor. The
Credit Facility will incorporate customary representations,
warranties and positive and negative interim covenants. Extension
of the Credit Facility is subject to customary conditions
including, but not limited to, the execution of definitive
agreements in respect of the Credit Facility and the execution of
participation agreements for each of the Insider Lenders. The TSXV
has conditionally accepted the Credit Facility.
The extension of the Credit Facility by the Insider Lenders will
be considered a related party transaction within the meaning of
Multilateral Instrument 61-101 Protection of Minority
Security Holders in Special Transactions ("MI
61-101"). The Company will rely on exemptions from the formal
valuation and minority approval requirements in sections 5.5(b) and
5.7(1)(f) of MI 61-101 in respect of such insider participation.
Following the closing of the Credit Facility, additional details
will be provided in the Company's press release and a subsequent
material change report to be filed on SEDAR. The Company will not
be positioned to file a material change report in respect of the
related party transaction between the Company and the Insider
Lenders less than 21 days prior to completion of the Credit
Facility. Given the application of funds and the timing thereof,
the Company deems it reasonable in order to be able to expedite the
Credit Facility and affect the closing of the Transaction.
About Precision Biomonitoring
Precision Biomonitoring Inc. was founded in 2016 by a team of
scientists from the Biodiversity Institute of Ontario at The University
of Guelph. By 2017 PBI had begun providing an innovative,
portable and proprietary TripleLock™ environmental DNA (eDNA)
surveillance solution to the environmental consulting market,
enabling early and rapid detection of organisms on site. In 2020,
responding to the emerging global COVID pandemic, PBI established a
human diagnostics division and applied their expertise in genetic
testing to develop the TripleLock™ SARS-CoV-2 (COVID) qPCR testing
platform, approved by Health Canada and the EU and commercially
available for laboratory testing in Canada. To complement this highly specific and
sensitive lab-based test, PBI partnered with their eDNA
collaborator Biomeme, becoming the exclusive Canadian distributor
of Biomeme's mobile SARS-CoV-2 Real-Time PCR test and rapid mobile
detection platform. The SARS-CoV-2 portfolio was further expanded
with distributorship of the Quidel SARS-CoV-2 Antigen Fluorescent
Immunoassay (FIA) and Sofia
analyzer. Today PBI is at the forefront of technological
innovations in the genomics industry, with a vision of a world
where we can identify any organism on the spot, in an instant,
anywhere on the planet.
About SQI Diagnostics
SQI Diagnostics is a life sciences and diagnostics company that
develops and commercializes proprietary technologies and products
for advanced microarray diagnostics. The Company's proprietary
microarray tests and fully automated systems are designed to
simplify protein and antibody testing workflow, increase
throughput, reduce costs and provide excellent data quality. For
more information, please visit www.sqidiagnostics.com.
Contact:
Morlan
Reddock
Chief Financial Officer
437-235-6563
mreddock@sqidiagnostics.com
CAUTIONARY NOTES
This news release contains certain "forward-looking
statements", including, without limitation, statements containing
the words "will", "may", "expects", "intends", "anticipates" and
other similar expressions which constitute "forward-looking
information" within the meaning of applicable securities laws.
Forward-looking statements reflect the Company's current
expectation, assumptions and beliefs, and are subject to a number
of risks and uncertainties that could cause actual results to
differ materially from those anticipated. The forward-looking
statements in this news release include without limitation,
statements with respect to the terms of the Transaction and the
Credit Facility, the anticipated benefits of the Transaction to the
Company, the anticipated closing of the Transaction and the Credit
Facility, and the final approval of the TSXV, among others. These
forward-looking statements are qualified in their entirety by the
inherent risks and uncertainties surrounding future expectations.
Important factors that could cause actual results to differ
materially from expectations include, but are not limited to, risks
related to the failure to obtain necessary regulator and TSXV
approvals for the Transaction and the Credit Facility, if
applicable, general economic and market factors, competition, the
ability of the Company to integrate the Business into its existing
operations, the effect of the global pandemic and consequent
economic disruption, and the factors detailed in the Company's
ongoing filings with the securities regulatory authorities,
available at www.sedar.com. Although forward-looking statements
contained herein are based on what management considers to be
reasonable assumptions based on currently available information,
there can be no assurance that actual events, performance or
results will be consistent with these forward-looking statements,
and our assumptions may prove to be incorrect. Readers are
cautioned not to place undue reliance on these forward-looking
statements. The Company undertakes no obligation to publicly update
or revise any forward-looking statements either as a result of new
information, future events or otherwise, except as required by
applicable laws.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy any securities in the United States. The securities of the
Company have not been and will not be registered under the United
States Securities Act of 1933, as amended, (the "U.S. Securities
Act"), or any state securities laws and may not be offered or sold
within the United States except
pursuant to an available exemption from the registration
requirements of the U.S. Securities Act and applicable state
securities laws.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this
release.
SOURCE SQI Diagnostics Inc.