TORONTO, Aug. 27, 2020 /CNW/ - SQI Diagnostics
Inc. ("SQI" or the "Company") (TSX-V: SQD) (OTCQB:
SQIDF), today reported its financial and
operational results for the three and nine months ended
June 30, 2020.
SQI is a Toronto-based life
sciences and diagnostics company that develops and commercializes
proprietary technologies and products for advanced multiplexed
diagnostics.
Business Highlights
- COVID-19 patient triage test clinical development program
progressing.
- Completed sale of SQID-X to the University of Buffalo for
developmental RALI-DX COVID-19 triage testing program.
- Successfully completed a $3.1
million financing through the exercise of warrants.
- Announced Rob Chioini as the
Company's new Chief Executive Officer.
Mr. Rob Chioini, CEO of SQI
stated, "I am very happy to be working with the SQI team. We have
been diligently evaluating the business and we see great potential
to grow the Company across multiple, exciting revenue-stream
opportunities. We plan to share our strategic vision shortly."
Q3 2020 and year-to-date Financial Results Overview
For the quarter ended June 30,
2020, the Company recorded a net loss of $1,473,000 ($0.01
net loss per share) as compared to a net loss of $1,888,000 ($0.01
net loss per share) for the same period last year. For the nine
months ended June 30, 2020, the
Company recorded a net loss of $5,756,000 ($0.02
net loss per share) as compared to the net loss of $5,214,000 ($0.03
net loss per share) for the same period last year. The net loss in
the current period was lower than the net loss in the corresponding
prior year period primarily due to lower expenses in Research &
Development ("R&D"), offsetting lower revenue for the period.
The net loss in the nine-month period was higher than the net loss
in the equivalent period last year due to lower revenue as expenses
were essentially flat when compared to the same prior year
period. Per share values are based on the weighted average
shares outstanding in the relevant period. For the quarter and nine
months ended June 30, 2020, there was
an average of 277,149,000 and 253,688,000 shares outstanding,
respectively.
Total revenues for the quarter ended June
30, 2020 were $296,000
compared to $540,000 for the
equivalent period last year. Total revenues for the nine months
ended June 30, 2020 were $772,000 compared to $1,251,000 for the same period last year. Product
revenue, which includes revenue from kit sales was $266,000 for the current quarter compared to
$313,000 for the same period last
year. Product revenue was $528,000
for the nine months ended June 30,
2020 compared to $846,000 for
the same period last year. The decrease in product revenue was due
to the loss of one customer, which accounted for a material
percentage of revenue in the same prior year period. Revenue
from services in the third quarter was $30,000 compared to $227,000 in the corresponding period last year.
Revenue from services for the nine months ended June 30, 2020 was $244,000 compared to $405,000 in the same period last year. Service
revenues were lower in the third quarter of 2020 compared to the
same prior year period due to the recognition of revenue from a
large contract to develop multiple lung transplant products in the
third quarter of 2019.
Research and development ("R&D") expenditures, excluding
amortization and stock-based compensation, for the quarter ended
June 30, 2020 were $572,000 compared to $1,145,000 for the same period last year.
R&D expenditures, excluding amortization and stock-based
compensation, for the nine months ended June
30, 2020 were $2,774,000
compared to $2,717,000 for the same
period last year. R&D expenses remained essentially unchanged
for the nine-month periods as lower salaries and wages, which
included payments received under the Canada Emergency Wage Subsidy program were
offset by higher laboratory costs and supplies as well as a lower
amount of Scientific Research and Experimental Development ("SRED")
tax credit. Laboratory costs and supplies were lower during the
quarter and higher during the nine months ended June 30, 2020, when compared with the
corresponding periods prior year. These costs tend to vacillate due
to the timing of R&D projects.
Corporate and general expenses, excluding stock-based
compensation, totaled $523,000 for
the quarter ended June 30, 2020 as
compared to $397,000 for the same
period last year. Corporate and general expenses, excluding
stock-based compensation, totaled $1,330,000 for the nine months ended June 30, 2020 when compared to $1,087,000 for the same period last year due to
higher professional fees. Professional fees include legal, investor
relations and consulting fees. Professional fees were higher in the
current quarter compared to the same period last year due to higher
legal and recruiting costs.
Sales and marketing expenses, excluding stock-based
compensation, decreased to $161,000
for the quarter ended June 30, 2020
compared to $316,000 for the same
period last year and decreased to $805,000 for the nine -month ended June 30, 2020 compared to $964,000 for the same period last year. The
reduction in sales and marketing costs is attributable to lower
headcount and travel & marketing costs.
Non-cash, stock-based compensation charges decreased to
$70,000 for the quarter ended
June 30, 2020 compared to
$130,000 for the same period last
year. Non-cash, stock-based compensation charges decreased to
$305,000 for the nine months ended
June 30, 2020 compared to
$429,000 for the same period last
year. The reduction is a result of forfeitures of stock options
associated with the departure of certain employees as well as a
delay in the granting of stock options to employees when compared
to the same period in 2019.
At June 30, 2020, current assets
were $5,388,000 including
$4,320,000 of cash compared to
$4,494,000 including $3,444,000 of cash at September 30, 2019. At June 30, 2020, the Company had a $3,975,000 working capital surplus compared to a
working capital deficit of $217,000
at September 30, 2019. The higher
surplus is due to a change in the classification of debentures
which matured in the second quarter of 2020 and were subsequently
extended; this extension changed the classification from a current
liability to a long-term liability in the period. Higher cash from
financing activities also contributed to the working capital
surplus.
Detailed financial statements and the management's
discussion and analysis (MD&A) will also be made available on
the Company website at www.sqidiagnostics.com and at
www.sedar.com.
Financial and Business Highlights for the Quarter and Year to
Date:
Corporate Financing Transactions:
Warrants and Options
During June 2020, a total of
29,011,117 warrants were exercised by certain insiders of the
Company for total gross proceeds of $3,111,000. A total of 25,000,005 of the warrants
issued in connection with a March
2019 private placement were exercised at a price
$0.11 per share while 4,011,112
warrants issued in connection with the debt refinancing conducted
in this fiscal year's second quarter being exercised at a price
$0.09 per share.
On June 10th, 195,000 options were
exercised at a weighted average price $0.15 for gross proceeds of $30,000.
For more information, please contact:
Chief Financial Officer
Morlan Reddock
416.674.9500 ext. 277
mreddock@sqidiagnostics.com
About SQI Diagnostics
SQI Diagnostics is a life
sciences and diagnostics company that develops clinical-grade
multiplexed microarray and molecular assays run on its automated
instrumentation for the pharmaceutical research, animal health, and
clinical diagnostics markets. SQI develops custom research and
diagnostic assays that are "multiplexed"; which means many
individual tests can now be simplified, consolidated and automated
into a single test. This significantly increases sample
throughput, reduces time, cost and chance for human error, and
provides excellent data quality. For more information, please visit
sqidiagnostics.com.
Forward-looking Statements
This press release contains certain statements including,
without limitation, the words "may", "plan", "will", "estimate",
"continue", "anticipate", "intend", "expect", "believe", "in the
process", "benefits", "leading to", "position" "possible", "is
subject to" and other similar expressions which may constitute
"forward-looking statements" within the meaning of applicable
securities laws. Forward-looking statements reflect the Company's
current expectations and assumptions, and are subject to a number
of risks and uncertainties that could cause actual results to
differ materially from those anticipated. Readers are
cautioned not to place undue reliance on these forward-looking
statements. These forward-looking statements involve risks and
uncertainties including, but not limited to: our
ability to market and sell our products including our novel
multiplexing technologies and detection platforms; our
ability to maintain any technical or product advantages; the
success of our Diagnostic Tools and Services business and our
intent to build near-term revenue streams from this business; the
successful regulatory filing and receipt of regulatory approvals
for our later stage quantitative diagnostic consumable kits;
adverse changes in general economic conditions; international risk
and currency exchange fluctuations; competitor activity; technology
changes; regulatory approvals and the impact of healthcare reform
legislation; and, SQI's ability to raise additional funds in the
future.
Such statements, risks and uncertainties are detailed in the
Company's ongoing filings with the securities regulatory
authorities, and are available to the public at
www.sedar.com. 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 securities laws.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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SOURCE SQI Diagnostics Inc.