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TORONTO, Jan. 10, 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 announce that it has signed a
definitive agreement (the "Definitive Agreement") to
acquire, through its wholly-owned subsidiary, SQI Diagnostics
Systems Inc. ("SQI Diagnostics"), substantially all of the
assets (the "Transaction") underlying Precision
Biomonitoring Inc.'s ("PBI") 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.
Completion of the Transaction is subject to customary conditions
including, but not limited to, the completion of satisfactory due
diligence and the approval of the TSX Venture Exchange Inc.
("TSXV"). Closing of the Transaction is anticipated on or
before February 14, 2022.
"PBI is an industry leader in the molecular detection of
organisms. We believe that the PBI team have done an outstanding
job of building a human PCR testing business that nimbly and
effectively brings innovative testing solutions to market," said
Andrew Morris, President and CEO of
SQI Diagnostics. "We're looking forward to continue serving their
customers, integrating their commercially and clinically successful
team into our SQI family, and making our EXACT COVID-19 antibody
test available to those same customers, once approved."
Transaction Highlights
- The Transaction is expected to be immediately beneficial to SQI
with the acquisition of positive net cash flows of the Business
with effect from January 10, 2022.
The Business unit recorded gross revenue of approximately
$4,500,000 (unaudited) for the
quarter ended September 30, 2021,
with an effective operating margin of over 40% (unaudited).
- The Business gives SQI a self-contained and mobile COVID-19 PCR
human testing business line that is being used for on-site employee
screening in the media, entertainment, mining, hospitality and
travel sectors.
- SQI acquires exclusive Canadian distribution of Biomeme Inc.'s
mobile SARS-CoV-2 real-time RT-PCR Test products for human use,
which are molecular COVID-19 PCR testing kits, and are approved by
Health Canada under an Interim Order. The SARS-CoV-2 real-time
RT-PCR Test products detect all significant variants of COVID19,
including the Omicron variant.
- SQI acquires exclusive Canadian distribution of Biomeme's Rapid
Mobile Testing devices for human use — specifically the "Franklin"
portable test reader - which gives results in less than an hour and
is also approved by Health Canada under an Interim Order.
- SQI aqcuires TripleLocKTM SARS-CoV-2 RT-qPCR
Technology, which includes rapid, point-of-care testing systems and
kits, and lab-based diagnostic RT-qPCR testing systems that can
give accurate results for 9 to 96 samples in just 60 minutes. The
lab-based TripleLock SARS-CoV-2 RT-qPCR is approved by Health
Canada under an Interim Order.
- Certain employees of the Business are anticipated to join SQI
concurrently with the completion of the Transaction to continue
operating the Business unit.
"Now that the Omicron variant is spiking worldwide, rapid
testing technologies are becoming an increasingly important and
in-demand tool to help contain the spread of COVID and save lives,"
said Morris. "SQI, as a growing commercial entity and emerging
leader in this space, has a duty and an opportunity to get these
products to market and into the hands of the people who urgently
need them."
Transaction Particulars
Under the terms of the Definitive Agreement, SQI Diagnostics
will purchase substantially all of the assets underlying the
Business for a total aggregate purchase price of $6,825,000 (the "Purchase Price")
consisting of cash in the amount of $6,145,000, and 4,171,779 common shares in the
capital of the Company (the "Consideration Shares") at a
deemed price of $0.163 per share with
a value of $680,000. The
Consideration Shares will be subject to a statutory four-month hold
period from the closing date. The Business assets consist primarily
of intangible assets and goodwill. The Company is not acquiring any
long term debt or working capital under the Transaction. On the
closing date, the Company will also be purchasing from PBI certain
remaining inventory. Upon closing of the Transaction, SQI will
continue to carry on the Business.
The terms of the Transaction were negotiated at arm's length.
The Transaction will constitute a Fundamental Acquisition under
TSXV Policy 5.3 and as such it will require TSXV approval. As the
Transaction is arm's length and there is not expected to be any new
control persons created, it is not expected that shareholders of
SQI will be required to approve the Transaction. Trading of SQI's
common shares on the TSXV has been halted until the earlier of
satisfactory review of the proposed Transaction by the TSXV, or the
closing of the Transaction.
In connection with the Transaction, SQI expects to complete a
financing in order to satisfy the cash portion of the Purchase
Price and the acquisition of certain Business inventory.
Further details will follow in subsequent news releases.
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
compliment 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
financing, the anticipated benefits of the Transaction to the
Company, the anticipated closing of the Transaction and the
financing, and the use of proceeds of the financing, the 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
financing, 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.