SQI Diagnostics Reports First Quarter 2021 Results

Rhea-AI Summary

SQI Diagnostics Inc. reported its Q1 2021 financial results, noting sales of $0.2M, unchanged from Q1 2020. Gross profit fell to $0.1M from $0.2M due to lower sales. SG&A expenses rose to $1.9M, driven by increased stock-based compensation and consulting fees. R&D expenses increased to $1.8M reflecting heightened clinical development activity. The net loss widened to $3.7M compared to $2.0M in Q1 2020. However, cash and investments increased to $5.1M, bolstered by a $4.0M funding from warrant exercises. The company initiated a clinical study for its COVID-19 HOME Antibody Test.

Positive

• Cash and investments increased to $5.1M as of December 31, 2020, up from $1.5M a year earlier.
• Successfully raised $4.0M from warrant exercises, enhancing financial position.
• Initiated clinical study for direct-to-consumer COVID-19 HOME Antibody Test, indicating progress in product development.

Negative

• Sales remained stagnant at $0.2M in Q1 2021, showing no growth compared to Q1 2020.
• Gross profit declined to $0.1M as a result of lower sales, impacting profitability.
• SG&A expenses surged to $1.9M, up significantly from $0.7M, largely due to increased compensation and fees.

TORONTO, March 1, 2021 /PRNewswire/ - SQI Diagnostics Inc. (TSXV: SQD) (OTCQB: SQIDF), a precision medicine company that discovers, develops and commercializes innovative rapid diagnostic testing for healthcare professionals, patients and consumers worldwide, today reported its financial and operational results for the first quarter of fiscal year 2021, ended December 31, 2020.

Q1 2021 Financial Highlights

• Sales were $0.2M in Q1 2021, compared to $0.2M in Q1 2020.
• Gross profit was $0.1M in Q1 2021, compared to $0.2M in Q1 2020 due to lower sales.
• SG&A expense was $1.9M in Q1 2021, compared to $0.7M in Q1 2020 due primarily to higher stock-based compensation and professional and consulting fees.
• R&D expense was $1.8M in Q1 2021, compared to $1.3M in Q1 2020 due to an increase in clinical development activity.
• Net loss was $3.7M or ($0.01) per share in Q1 2021, compared to $2.0M or ($0.01) per share in Q1 2020.
• Cash and investments were $5.1M December 31, 2020 compared to $1.5M December 31, 2019.
• Net working capital was $3.5M December 31, 2020 compared to ($2.1M) December 31, 2019.

Corporate Highlights during the Quarter:

• Initiated clinical study for the Company's direct-to-consumer COVID-19 HOME Antibody Test.
• Completed $4.0 million dollar funding via warrant exercise.

Mr. Robert L. Chioini, Chief Executive Officer of SQI stated, "We had a very productive quarter. We made solid progress on the clinical development of our unique COVID-19 tests and we strengthened our balance sheet with $4 million of gross proceeds from the exercise of warrants. Going forward, we anticipate realizing further funding via the exercise of Company warrants and greater advancement on our clinical development and commercialization efforts."

About SQI Diagnostics

SQI Diagnostics, Inc. is a precision medicine company that discovers, develops and commercializes innovative rapid diagnostic testing for healthcare providers, patients and consumers worldwide. The Company's proprietary advanced diagnostics target organ transplant, autoimmune disease and serological testing, which include the developmental direct-to-consumer COVID-19 HOME Antibody Test, the RALI-dx^™ COVID-19 Severity Triage Test and the COVID-19 RALI-fast^™ Severity Triage Point-of-Care (POC) Test. SQI's rapid diagnostic tests are intended to be sold to healthcare professionals so that patients can get accurate results and fast effective treatment, and direct-to-consumers so that individuals can be empowered to improve their health outcomes from the comfort of home.

Under serological testing, SQI is fast-tracking the development of three Covid-19 diagnostic tests: a direct-to-consumer Antibody Test and two Covid-19 Severity Triage tests. The COVID-19 HOME Antibody Test identifies the presence of IgM, IgA and IgG antibodies of SARS-CoV-2 in individuals suspected to have been infected with COVID-19 and asymptomatic individuals wanting to know if they have been exposed. The test is > 99% accurate with results delivered in 24-48 hours. The Company currently expects to apply to the U.S. Food and Drug Administration ("FDA") for Emergency Use Authorization ("EUA") for its Covid-19 HOME Antibody Test in the second quarter of calendar year 2021. Should the COVID-19 HOME Antibody Test receive regulatory approval, the test is expected to be available direct-to-consumer which would allow individuals to avoid travelling to a clinic or hospital to be tested for the presence of the SARS-CoV-2 antibody.

The RALI-dx^™ COVID-19 Severity Triage Test and the RALI-fast^™ COVID-19 Severity Triage POC Test each help clinicians identify which patients with SARS-CoV-2 will have a severe inflammatory response and require hospital admission or not. Both tests measure the critical biomarker IL-6 which plays a key role in the cytokine storm phase of COVID-19. The RALI-dx™ delivers results from the lab in about 50 minutes while the RALI-fast^™ delivers results at the patient's point-of-care in about 15 minutes. The Company currently expects to apply for EUA to the FDA and for an interim order with Health Canada for both tests in the first and second quarters of calendar year 2021, respectively.

Under organ transplant, SQI is pioneering the development of an advanced diagnostic test that increases the chance of successful lung transplant by assessing the health of the donor organ prior to transplant surgery. The Company's developmental TORdx^™ Lung Test can detect inflammation at the molecular level to assess the health of the donor lung, enabling surgeons to transplant healthy lungs which otherwise would have been rejected; there is currently no other such test. SQI has partnered clinical development with UHN Hospitals, one of the largest health and medical research organizations in North America. Upon regulatory approval of the TORdx^™ Lung Test, clinical development is planned for diagnostic tests designed to increase the chance of successful kidney and liver transplant.

Under autoimmune disease testing, SQI has a direct-to-consumer Celiac Disease and a Rheumatoid Arthritis (RA) Test that enable people to screen for the diseases from the comfort of their home. The direct-to-consumer RA Test can help identify and confirm RA symptoms for timely care and treatment. The direct-to-consumer Celiac Test confirms disease and validates the effectiveness of dietary and lifestyle changes to confirm the autoimmune response is improving.

The Company is not making any express or implied claims that its products can eliminate, cure or contain Covid-19 (or SARS-2 Coronavirus) at this time. For its research and development, the Company is collaborating with UHN Hospitals, one of the largest health and medical research organization in North America.

For more information, please visit www.sqidiagnostics.com.

FORWARD-LOOKING INFORMATION

This press release contains certain words and statements, which may constitute "forward-looking statements" within the meaning of applicable securities laws. Such forward-looking statements may be identified by words such as "anticipates", "plans", "proposes", "estimates", "intends", "expects", "believes", "may" and "will". The forward-looking statements reflect the current views of the Company with respect to future events and are subject to certain risks and uncertainties detailed in the Company's ongoing filings with the securities regulatory authorities, available to the public at www.sedar.com. Such statements are subject to numerous important factors, risks and uncertainties, many of which are beyond the company's control, that may cause actual events or results to differ materially from the company's current expectations. Management's expectations and therefore any forward-looking statements in this press release could be affected by risks and uncertainties relating to a number of factors, including, but not limited to, the following: the development and viability the Company's COVID-19 HOME Antibody Test, its COVID-19 RALI-dx^™ Severity Triage Test and its COVID-19 RALI-fast^™ Severity Triage Point-of-Care (POC) Test, the suitability of such tests for advanced clinical testing, including human trials, the content and timing of decisions made by the FDA relating to the use and commercialization of such tests, the timing and costs involved in establishing the commercialization of the tests, the impact that the ongoing COVID-19 pandemic may have on the company's business, including the expected development, manufacturing, regulatory and commercialization timelines relating to the aforementioned COVID-19-related tests. 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 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.

FAQ

What were SQI Diagnostics' financial highlights for Q1 2021?

In Q1 2021, SQI Diagnostics reported sales of $0.2M, a gross profit of $0.1M, and a net loss of $3.7M.

How much funding did SQI Diagnostics raise in Q1 2021?

SQI Diagnostics raised $4.0M through the exercise of warrants in Q1 2021.

What initiatives did SQI Diagnostics undertake in Q1 2021?

The company initiated a clinical study for its direct-to-consumer COVID-19 HOME Antibody Test.

What were the R&D expenses for SQI Diagnostics in Q1 2021?

R&D expenses were $1.8M in Q1 2021, up from $1.3M in Q1 2020.

What is the net loss reported by SQI Diagnostics for Q1 2021?

The net loss for Q1 2021 was $3.7M, compared to a loss of $2.0M in Q1 2020.