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SQI Diagnostics Reports Second Quarter 2023 Results



TORONTO, May 30, 2023 /PRNewswire/ – SQI Diagnostics Inc. (“SQI” or the “Company”) (TSXV: SQD) (OTCQB: SQIDF), a leader in the science of lung health that develops and manufactures respiratory health and precision medicine tests today reported its financial and operational results for the second quarter ended March 31, 2022. 

Q2 2023 Financial Highlights

  • Sales of $0.3M in Q2 2023, compared to $5.6M in Q2 2022. The significant decrease in sales is attributable to lower sales from the Company’s COVID-19 PCR human testing business as a result of widespread acceptance of antigen tests and relaxed testing requirements.
  • Gross profit was $0.1M in Q2 2023, compared to $2.9M in Q2 2022. The decrease is also a result of significantly lower sales from the Company’s COVID-19 PCR human testing business.
  • Corporate & General expenses were $1.0M in Q2 2023, compared to $2.4M in Q2 2022. The decrease is mainly related to lower expenses in transition costs and legal and financing fees which were higher in Q2 2022 in connection with the Company’s acquisition of Precision Biomonitoring Inc’s COVID-19 PCR business.
  • The R&D expense category, which includes Manufacturing, Quality and Engineering, was $0.4M in Q2 2023, compared to $2.8M in Q2 2022. The decrease was due to a reduction in consulting and clinical costs, lower stock-based compensation costs and lower salaries & wages due to an adjustment in variable compensation.
  • Net loss of $3.5M, or $0.01 per share, in Q2 2023, compared to a net loss of $2.6M, or $0.01 per share, in Q2 2022. The increase in net loss is due to the significant reduction in gross margin.
  • Cash and cash equivalents of $0.6M as of March 31, 2023.
  • Net working capital deficit of $9.7M as of March 31, 2023, compared to a net working capital deficit of $5.4M as of March 31, 2022. The increase in the working capital deficit was due to increases in both short-term borrowing and accounts payable.

Q2 2023 Corporate Highlights

  • On November 10, 2022, The Company entered into a funding agreement (the “Contribution Agreement”) with the Federal Economic Development Agency for Southern Ontario (“FedDev Ontario”) to support the Company’s manufacturing scale-up and commercialization of its pipeline of products in development. Under the terms of the Contribution Agreement, the Company will be able to draw down up to $2 million of funding in the form of interest-free contributions. During the quarter, the Company drew down $1.7 million under the Contribution Agreement.
  • During the quarter, the Company increased the amount borrowed under its credit facility with Pivot Financial by $500,000 and also extended the maturity date of the loan to April 30, 2023 and, subsequent to the quarter, further extended the maturity date of the loan to July 30, 2023.
  • During the quarter, the Company decided to concentrate its efforts on point-of-care (“POC”) products and to move away from laboratory-based products due to shifting market conditions. Consequently, we have reduced our workforce by approximately sixty-five percent, scaled back on expenses to reduce our go-forward cash burn by over fifty percent and gained the support of our strategic partners regarding the new direction of the Company. The Company also made the decision to exit the COVID-19 testing business due to a significant reduction in consumer demand for its products. We believe that these changes position us to leverage our core competencies and expedite our path to profitability.

Andrew Morris, Chief Executive Officer, SQI Diagnostics Inc. commented that “following a challenging Q2 2023, we restructured our business following a thorough review of our product portfolio by significantly reducing our workforce, cutting expenses and shedding non-core assets. We believe this restructuring was in the best interests of shareholders and are steadfast in our belief that a leaner organization will accelerate our path to profitability subject to our ability to successfully recapitalize the business and to continue the business as a going concern.”

Liquidity and Going Concern Risk      

While management considers that the preparation of its financial statements under the going concern basis is appropriate, there is significant doubt about the Company’s ability to continue as a going concern as the Company has a working capital deficit of $9,9M as at March 31, 2023 and for the three month period ended March 31, 2022 the Company incurred a net loss of $3.5M, which include impairment charges and asset write-downs totalling approximately $1.8M to reflect corporate restructuring including discontinued operations. The Company’s ability to continue as a going concern is dependent upon the Company’s ability to raise additional capital through equity and/or debt financings and achieve profitable operations. While the Company continues to pursue commercial sales, strategic partnering activities and funding opportunities, there are no assurances that it will be successful in generating revenues or raising additional investment capital to generate sufficient cash flows to continue as a going concern and there is significant doubt about the Company’s ability to continue as a going concern without achieving such revenue or financing in the near term. Should the Company be unable to continue as a going concern, it may be unable to realize the carrying value of its assets and to meet its liabilities as they become due.

As of the writing of the date hereof, the Company has not received any viable term sheets from potential sources of financing and management does not currently believe that the Company will have sufficient cash to continue operations as currently conducted beyond June 15, 2023 without successfully raising additional equity and/or debt capital. The Company will announce additional details relating to any new financing or financings, if any, in due course in the event that it is successful in negotiating and entering into definitive documentation relating to same. Please see the Company’s Condensed Interim Consolidated Financial Statements for the six months ended March 31, 2023 and March 31, 2022 and related Management Discussion & Analysis filed on SEDAR on May 30, 2023 for additional details regarding the Company’s current cash position and risks relating thereto.

About SQI Diagnostics

SQI Diagnostics is a leader in the science of lung health. The Company develops and manufactures respiratory health and precision medicine tests that run on SQI’s fully automated systems. The Company’s tests simplify and improve Rapid Acute Lung Injury testing, donor organ transplant informatics, and immunological protein and antibody testing. SQI Diagnostics is driven to create and market life-saving testing technologies that help more people in more places live longer, healthier lives. For more information, please visit


Chief Financial Officer
Morlan Reddock
[email protected]


This press release contains certain words and statements, which may constitute “forward-looking statements” within the meaning of applicable securities laws relating to future events or future performance and reflect the current expectations and assumptions of the Company regarding its growth, results of operations, performance, business prospects and opportunities. These statements generally can be identified by use of forward-looking words such as “may”, “would”, “could”, “will”, “should”, “expect”, “plan”, “estimate”, “anticipate”, “intends”, “believe”, “potential”, or “continue” or the negative thereof or similar variations. The Company’s actual results and performance discussed herein could differ materially from those expressed or implied by such statements. Such 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, among other things, general economic and market factors, competition, 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 Although the forward-looking statements contained herein are based on what we consider to be reasonable assumptions based on information currently available to us, 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 law.

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.

SOURCE SQI Diagnostics Inc.

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