TORONTO, Feb. 6, 2023 /CNW/ – 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, announces that SQI and Pivot Financial (“Pivot“) have agreed to extend the maturity date of SQI’s $7.5 million credit facility (the “Credit Facility“) with Pivot from January 31, 2023 to February 28, 2023 (the “Pivot Amendment“). SQI paid Pivot an administrative amendment fee of $50,000 in connection with the Pivot Amendment.
SQI also announces that the holders of its $2.09 million principal amount 10% secured debentures dated January 30, 2015, as amended (the “Debentures“) have agreed to the temporary deferral of all interest payments under the Debentures (the “Debentures Interest Deferral“). The holders of the Debentures are controlled by certain insiders of SQI who are also control persons of SQI (the “Insider Lenders“). All deferred interest under the Debentures Interest Deferral will become due upon demand by the holders of the Debentures, which demand may not be made earlier than June 1, 2023. All other terms of the Credit Facility and Debentures remain unchanged.
The Debentures Interest Deferral may be considered a related party transaction within the meaning of TSXV Policy 5.9 and Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101“). SQI relied on exemptions from the formal valuation and minority approval requirements in sections 5.5(b) and 5.7(f) of MI 61-101 in respect of the Debentures Interest Deferral.
Repayment of Credit Facility
The Company is in the process of identifying potential new sources of financing that could be used to repay the Company’s outstanding indebtedness under the Credit Facility; however, there can be no assurances as to whether it will be successful in doing so nor can there be certainty with respect to the terms of any such new financing or financings. The Company will announce additional details relating to any new financing or financings in due course in the event that it is successful in negotiating and entering into definitive documentation relating to same.
Credit Agreement
As previously announced, the Company entered into a credit agreement with Pivot, an arm’s length third party to the Company, relating to the extension of a short-term senior secured Credit Facility dated February 11, 2022 to satisfy the cash consideration payable by SQI pursuant to the Company’s acquisition of substantially all of the assets underlying Precision Biomonitoring Inc.’s human diagnostic COVID-19 PCR testing business and its TripleLock™ molecular diagnostic testing technology and for general working capital. The Insider Lenders participated in funding 50% of the principal amount advanced under the Credit Facility pursuant to the terms of participation agreements entered into between Pivot and the Insider Lenders dated February 14, 2022, as amended.
Debentures
As previously announced, the Company completed a non-brokered private placement of the Debentures at a price of $1,000 per Debenture for aggregate gross proceeds of $2,090,000 on January 30, 2015 and later amended the term of such Debentures to January 30, 2025. All of the Debentures are held indirectly by the Insider Lenders.
For additional details relating to the Credit Facility and Debentures please see the press releases of the Company dated February 24, 2022 and January 30, 2020, respectively.
About SQI Diagnostics
SQI Diagnostics are leaders in the science of lung health. We develop and manufacture respiratory health and precision medicine tests that run on SQI’s fully automated systems. Our tests simplify and improve COVID-19 mobile PCR, Point of Care antigen testing and antibody monitoring, Rapid Acute Lung Injury testing, donor organ transplant informatics, and immunological protein and antibody testing. We’re 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.
Contact:
Morlan Reddock
Chief Financial Officer
437-235-6563
mreddock@sqidiagnostics.com
