New Business Contributes $5.5M in Revenue
TORONTO, May 26, 2022 /CNW/ - 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 for fiscal year ending September 30, 2022.
"We're extremely pleased with our revenue growth this quarter, which we see as a validation of our decision to grow our business through acquisition and new product lines," said Andrew Morris, President and CEO of SQI Diagnostics. "As we move forward, we hope to see continued growth fuelled by our core lung health products like our the RALI-Dx™ IL-6 Severity Triage Test, Exact COVID19 Antibody test and our TOR-Dx Lung products."
Q2 2022 Financial Highlights
Sales were significantly greater than any quarter in SQI's history, coming in at $5.6M in Q2 2022, compared to $0.3M in Q2 2021. The increase in sales is due to the COVID-19 human testing business acquired during the quarter.
Gross profit was $3.0M in Q2 2022, compared to $0.3M in Q2 2021 driven by the highly profitable COVID-19 human testing business.
SG&A expense was $2.5M in Q2 2022, compared to $1.6M in Q2 2021. The increase in SG&A expense is mainly due to one-time costs related to the acquisition including financing, legal and transition support.
The R&D expense category, which includes Manufacturing, Quality and Engineering was $2.8M in Q2 2022, compared to $2.1M in Q2 2021. Higher costs are attributed to increased headcount as the Company gears up for commercialization. In addition, due to the increase in sales, the Company is no longer eligible to claim the Canada Emergency Wage Subsidy, the absence of which has eliminated the offset to costs in the current quarter, increasing the year-over-year change.
Cash and cash equivalents were $1.5M as of March 31, 2022
Net working capital was $(5.5M) as of March 31, 2022, compared to $0.7M on September 30, 2021; the working capital deficit is due to the $7.5M short term credit facility used to acquire the COVID-19 PCR business
Corporate Highlights during the Quarter:
The New York State Department of Health (NYSDOH) gave approval for the EXACT COVID-19 Antibody test to SQI's diagnostics partner KSL Diagnostics Inc. Access to the EXACT COVID-19 Antibody Test will now be available to physicians and their patients in the United States. The Company further reports that its previously announced marketing agreement with Azova Inc for it's direct to consumer COVID-19 antibody test has been terminated. The Company is actively pursuing a number of potential customers for this product approved by NYSDOH under CLIA.
To finance the acquisition of certain assets of Precision Biomonitoring Inc. , the company entered into a credit agreement with Pivot Financial, an arm's length third party and certain insiders of the company, for a short-term senior secured demand credit facility in the aggregate amount of $7,500,000 bearing interest at 15% per annum for a period of 2 months. Following the quarter, this credit facility was extended for another 2 months and is due on June 11, 2022.
The Company is currently working with UHN to assess the applicability of the RALI-Dx™ IL-6 Severity Triage Test; initial feedback from ICU staff has been very positive and supports the utility of a 15-minute point of care test in the ICU
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 COVID19 antibody monitoring, 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 www.sqidiagnostics.com.
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 www.sedar.com. 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.
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SOURCE SQI Diagnostics Inc.
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