a life sciences and diagnostics company that develops and commercializes proprietary technologies and products for advanced microarray diagnostics, today announced its financial and operational results for its fiscal second quarter, ended March 31, 2014.
“This quarter we reported our first revenue from sales to our global pharmaceutical customers, who are adopting our products and services with growing momentum. Pharma expends considerable resources to evaluate and guide the development of their drug candidates. The revenues reported this quarter validate our ability to tap into this new and exciting market, where multiplex testing technologies from SQI can help make drug development significantly more efficient,” said Andrew Morris, CEO of SQI Diagnostics.
“Since mid-2013, SQI has signed four Master Service Agreements with some of the largest pharmaceutical companies in the world to evaluate our testing products. We have completed prototypes under all of these agreements, each in a matter of weeks, and so far, converted two of these initial evaluations into paying customers. For the second half of fiscal 2014 and beyond, we will continue to focus on expanding revenue-generating opportunities with our current customers and on securing additional customers,” added Mr. Morris. “We also made significant progress in our IVD business, where we sell a menu of regulated multiplex tests for disease diagnosis and management, targeting high-volume reference laboratories. During the quarter we obtained Health Canada clearance for our quantitative Celiac DGP assay, which we are now preparing to market in Canada while concurrently seeking its regulatory clearance in additional markets.”
During the fiscal second quarter, SQI recorded its first revenue resulting from product sales to drug development companies, which included the completion of a paid evaluation by a customer confidentially identified as “Global Pharma 3”. Revenue for the quarter-ended March 31, 2014 was $18,000 compared to $NIL for the quarter-ended March 31, 2013. Revenue for the six months ended March 31, 2014 was $20,000 compared to $NIL for the same period last year.
For the quarter-ended March 31, 2014, the Company recorded a net loss of $956,000 ($0.02 per share) compared to a net loss of $1,351,000 ($0.03 per share) for the quarter-ended March 31, 2013. The net loss for the six months ended March 31, 2014 was $2,457,000 ($0.05 per share) compared to a net loss of $2,914,000 ($0.07 per share) for the same period last year. The Company implemented cost cutting measures in the second quarter of fiscal 2014 and finalized validation and verification work on the Celiac DGP panel in January of 2014, contributing to the decrease in net loss over the comparative periods.
R&D expenditures for the three months ended March 31, 2014 were $362,000 compared to $549,000 for the same period last year. R&D expenditures, excluding amortization and stock-based compensation, for the six months ended March 31, 2014 were $1,202,000 compared to $1,323,000 for the same period last year. The Company temporarily reduced several R&D positions in fiscal Q2, 2014 to manage expenses.
Corporate and general expenses, excluding stock-based compensation, were $345,000 for the three months ended March 31, 2014 compared to $391,000 for the three months ended March 31, 2013. Corporate and general expenses, excluding stock-based compensation, were $643,000 for the six months ended March 31, 2014 compared to $781,000 for the six months ended March 31, 2013. The decreases are due to general cost containment efforts.
Sales and marketing expenses primarily related to sales and marketing consultant fees and to travel and excluding stock-based compensation, totalled $71,000 for t 2014 compared to $102,000 for2013. Sales and marketing expenses, excluding stock based compensation, totalled $221,000 for the six months ended March 31, 2014 compared to $211,000 for the six months ended March 31, 2013. The decrease in the costs for the quarter ended March 31, 2014 as compared the quarter ended March 31, 2013 is due to the timing of conferences and marketing activities..
On January 27, 2014 the Company completed a non-brokered private placement of 2,965,000 units of the Company at $0.50 per unit for gross proceeds of $1,483,000.
At March 31, 2014, current assets were $1,151,000 compared to $1,724,000 at September 30, 2013. As at March 31, 2014 the Company had a $533,000 working capital surplus compared to a surplus of $1,270,000 at September 30, 2013.
Subsequent to the end of the quarter, on April 10, 2014 the Company completed a public offering of 8,400,000 units of the Company at a price of $0.50 per unit for gross proceeds of $4,200,000. Each unit comprises one common share of the Company and one Common Share purchase warrant. Each warrant is exercisable at a price of $0.65 and entitles the holder thereof to acquire one Common Share until April 10, 2016. As a result of the financing and additional cost reductions the Company now has funds sufficient to meet its anticipated cash requirements for approximately the next twelve months.
SQI Diagnostics to Extend Warrant Expiry
SQI received approval from the TSX Venture Exchange on May 8, 2014 to extend the expiry of 3,508,171 outstanding common share purchase warrants ("the Warrants") of the Company that were issued in connection with the Company's private placement financing which was completed on June 20, 2012. The Warrants which were issued on May 11, 2012, May 17, 2012, June 14, 2012 and June 20, 2012 had expiry dates of May 10, 2014, May 16, 2014, June 13, 2014 and June 19, 2014 respectively have all been extended for one year. All other terms of the warrants remain unchanged.
Detailed financial statements and the MD&A are available at www.sedar.com.
About SQI Diagnostics
SQI Diagnostics is a life sciences and diagnostics company that develops and commercializes proprietary technologies and products for advanced microarray diagnostics. The Company’s proprietary microarray tests and fully-automated systems are designed to simplify protein and antibody testing workflow, increase throughput, reduce costs and provide excellent data quality. For more information, please visit www.sqidiagnostics.com.
Investor Relations Contact:
Chief Executive Officer
416.674.9500 ext. 229
VP Corporate Development
416.674.9500 ext. 241
This news release contains certain forward-looking statements, including, without limitation, statements containing the words “will”, “expects”, “intends” and other similar expressions which constitute “forward-looking information” within the meaning of applicable securities laws. Forward-looking statements reflect the Company's current expectation and assumptions, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. These forward-looking statements involve risks and uncertainties including, but not limited to risks related to the failure to obtain necessary regulatory approvals, general economic and market segment conditions, and international risk and currency exchange, agreements and future agreements to sell our products, the success of our Diagnostic Tools and Services business and our intent to build near-term revenue streams from this business, the successful regulatory filing and receipt of regulatory approvals for our later stage quantitative diagnostic kits, the acceleration of our revenue ramp, general economic and market segment conditions, competitor activity, technology changes and regulatory approvals. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks and uncertainties and other risks detailed from time-to-time in the Company’s ongoing filings with the securities regulatory authorities, which filings can be found at www.sedar.com. Actual results, events, and performance may differ materially. 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 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.