SQI Diagnostics Acquires Assets of Precision Biomonitoring Inc.

SQI Diagnostics Inc., a developer and manufacturer of respiratory health and precision medicine tests, has completed its previously announced asset acquisition of Precision Biomonitoring Inc.’s (PBI) human diagnostic COVID-19 PCR testing business and its TripleLock molecular diagnostic testing technology.
 
“Based on recent data from Health Canada, current hospitalizations and ICU bed numbers in Canada are more than double the highest point since April 2020, so it remains vitally important to bring innovative, mobile and accessible COVID-19 PCR testing capabilities to market,” said Andrew Morris, CEO of SQI. “From our acquisition date on January 10 to January 31, 2022, PBI recorded net revenue in its human testing Business of approximately $3.5 million (unaudited) — which is more than double the entire month of December 2021 at approximately $1.3 million (unaudited), and with an effective operating margin over the period of over 40% (unaudited). This — combined with high COVID positivity numbers — tells us that demand for testing remains high, because the need remains great.”
 
Pursuant to the terms of the definitive agreement, the company acquired the business through its wholly owned subsidiary, SQI Diagnostic Systems Inc., for aggregate consideration of $6,825,000 consisting of $6,145,000 in cash and 4,171,779 common shares in the capital of the company at a deemed price of $0.163 per share with an aggregate deemed value of $680,000. The Consideration Shares are subject to a statutory four-month hold period from the dated hereof. In addition, on closing of the transaction, the company acquired certain business inventory for a total cash purchase price of $616,243.37.
 
To assist the company with the funding of the Transaction, the company entered into a credit agreement with Pivot Financial, an arm’s length third party, with respect to the extension of a short term senior secured demand credit facility in the aggregate amount of $7,500,000. Certain insiders of the company also participated in funding the Credit Facility pursuant to the terms of a participation agreement entered into between Pivot and the Insider Lenders. The balance of the Credit Facility is being applied to general corporate and working capital purposes.
 
The transaction and the Credit Facility remain subject to final approval of the TSX Venture Exchange Inc.