SQI Diagnostics Reports First Quarter 2023 Results.

TORONTO: SQI Diagnostics Inc. (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 first quarter ended December 31, 2022.

Q1 2023 Financial Highlights

Sales of $.4M in Q1 2023 were significantly higher, compared to $0.1M in Q1 2022. The increase in sales is attributed to the COVID-19 human testing business acquired during the second quarter of fiscal 2022.

Gross profit was $0.1M in Q1 2023, compared to $0.1M in Q1 2022.

Corporate & General expenses were $1.1M in Q1 2023, compared to $1.6M in Q1 2022. The decrease is mainly related to lower stock-based compensation due to the pausing of vesting of certain milestone options as well as lower salaries & wages as the current CEO and the previous CEO were paid in Q1 2022.

The R&D expense category, which includes Manufacturing, Quality and Engineering was $1.4M in Q1 2023, compared to $1.7M in Q1 2022. The decrease was due to lower lab costs as a result of a significant reduction in consulting costs, lower stock-based compensation costs partially offset by higher salaries & wages due to an increase in R&D personnel as well as salary adjustments to reflect market rates for select personnel.

Net loss was ($3.1M) of ($0.01) per share, compared to ($3.4M) or ($0.01) per share.

Cash and cash equivalents were $0.6M as of December 31, 2022.

Net working capital was $(9.2M) as of December 31, 2022, compared to $2.7M on December 31, 2022; the working capital deficit is due primarily to the $7.5M short term credit facility used to acquire the COVID-19 PCR business from Precision Biomonitoring Inc in Q2 2022.

Q1 2023 Corporate Highlights

The Company secured an Interim Order from Health Canada for its RALI-Dx IL-6 Severity Triage Test in November 2022. The RALI-Dx IL-6 Severity Triage Test is the first of its kind to enter the Canadian market.

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.

On October 19, 2022, the maturity date of its secured $7,500,000 credit...