today reported its financial and operational results for the fourth quarter and fiscal year ended September 30, 2015.
SQI is a Toronto-based life sciences and diagnostics company that develops and commercializes proprietary technologies and products for advanced multiplexed diagnostics.
SQI’s proprietary technology is used to create custom tests for clients in the drug development market that can now deliver as many as 30 unique results -- with the potential for more -- from a single SQI test. In doing this, it removes the work needed to develop, run, and purchase materials for 30 separate single tests. Our customers benefit from a significantly reduced cost per result with superior quality data.
Said Andrew Morris, SQI’s President and CEO: “The 2015 fiscal year marks a major milestone in the Company’s growth. While we generated some revenue from paid development work during the past year, the real success in 2015 was the validation of our technology by our customers. We believe that this validation will result in the adoption of our technology. In fiscal 2016 we anticipate significant recurring revenues from the sales of consumable kits to customers who integrate SQI technology into their internal testing programs.”
Fiscal 2015 Financial and Business Highlights
We entered into a three year, multiproduct Laboratory Services Agreement with a Global Pharma customer.
We converted early-stage customer relationships developed in fiscal 2014 into seven active customers in fiscal 2015. Overall revenues were $443,000 for FY15 compared to $119,000 in FY14.
We installed a fully automated sqidlite™ system at one of our Global Pharma customer’s US-based facilities. Under the terms of the agreement, the customer will use our equipment mainly to validate the performance of a 21-plex test developed for them to run on SQI’s sqidlite™ system. Successful, final evaluation is expected to result in the purchase of the sqidlite™ system and the on-going sales of customized consumable kits for use in the customer’s clinical programs.
We announced that our immunogenicity testing technology was highlighted by Bristol-Myers Squibb (“BMS”) in both a presentation and a case study at the 9th Annual Workshop on Recent Issues in Bioanalysis in Miami, Florida.
We successfully completed work for a customer in the animal health market to convert three existing single plex infectious disease tests to SQI's multiplex platform as part of their evaluation of our technology. The success of these results is expected to lead to a broader commercial agreement with this customer for multiplexing a series of their existing tests as well as the sale of our automated systems to run the tests we have developed.
We continued development work with our DNA customer to automate and expand the manufacturing for their infectious disease test panels. The first test is a 31-plex DNA-based test to detect infections in human blood DNA. This “molecular” testing for infectious disease represents a new and exciting business segment for SQI. It also represents an important diversification into DNA-Infectious disease testing with its large market for high volume multiplexed tests.
We continued to deliver highly positive results for another Global Pharma customer in testing its pre-clinical samples in our lab. Samples tested over the second and third quarter of fiscal 2015 generated exceptional results compared with the customer’s prior testing method.
We enhanced the Board of Directors with the appointment of four significant shareholders who were elected to the Board on April 7, 2015.
We raised a total of $5.9 million through the completion of both a debenture financing and an equity financing. SQI issued debentures for a principal amount of $3.2 million and issued 5,330,000 equity units at a price of $0.50 per unit for gross proceeds of $2.7 million.
Subsequent to the completion of the fiscal year, on December 15, 2015 the Company completed a private placement of 7,480,945 units of the Company at $0.40 per unit for gross proceeds of $2,992,000. Company insiders subscribed for an aggregate of 7,005,945 units. Each Unit will consist of one common share and one common share purchase warrant. Each common share purchase warrant will entitle the holder to purchase one common share at a price of $0.52 for a period of three years from the date of issuance.
Fiscal 2016 Objectives and Outlook
Looking forward; into 2016, the Company’s main objectives are:
Delivering high satisfaction to our clients, win repeat business from them, and broaden our relationships with them.
Advancing our current business development agreements with Global Pharma customers into significant orders and recurring commercial revenues.
Developing profitable applications that benefit from multiplex, low cost and automation.
Reduce the total cost of delivery of our products and technology through manufacturing upgrades.
Leveraging our technology to address multiple applications on the same platform for each customer.
Partnering with diagnostic companies with existing commercial franchises in specific market segments.
Converting our customer’s existing single plex test to SQI’s multiplexed platform with recognized laboratory leaders.
In each of SQI’s target markets, our products are designed to reduce labour and costs through multiplexing, simplifying the testing process and reducing errors through automation. Our technology also shortens the time needed to produce a more informed answer. In short, SQI’s technologies enable our customers to achieve their development goals with a solution that is cheaper, quicker, and more accurate than existed before.
Q4 and Fiscal 2015 Financial Results Overview
Revenue for the year ended September 30, 2015 was $443,000 versus $119,000 for the year ended September 30, 2014. Revenue growth represents recurring development services revenue from many customers across multiple applications of our technology. This includes services for our global pharmaceutical customers, our UK-based DNA customer as well as a new customer in the veterinary health sector.
The net loss for FY15 was $6,097,000 ($0.11 loss per share) as compared to $5,460,000, ($0.11 loss per share) for FY14. The increase in the net loss year-over-year was a result of interest and accretion charges on the secured debentures, and increases in professional fees, investor relations and marketing expenditures.
Research and development (R&D) costs, excluding amortization, stock-based compensation and the SR&ED Investment Tax Credit were $2,941,000 for FY15. This compares to $3,014,000 for FY14. For the three months ended September 30, 2015 the costs were $779,000 compared to $757,000 for the same period in 2014. The costs are consistent as the Company continued to focus on the development work for customers in its drug development tools and services business.
Corporate and general expenses, excluding stock-based compensation, totaled $1,857,000 for FY15 compared to $1,537,000 for FY14. For the three months ended September 30, 2015 the costs were $434,000 compared to $478,000 for the same period in 2014. The increase in corporate and general expenses year over year is a result of increased professional fees, travel, stock exchange filing fees and the effects of the US dollar exchange rate. The decrease in corporate and general fees for the fourth quarter of fiscal 2015 compared to the fourth quarter of fiscal 2014 is primarily the result of the waiver of Board of Directors’ fees since April of 2015.
Sales and marketing expenses, excluding stock-based compensation, totaled $767,000 for FY15 compared to $540,000 for FY14. For the three months ended September 30, 2015 the costs were $177,000 compared to $112,000 for the same period in 2014. Sales and marketing expenses were higher for the three months ended September 30, 2015 compared to the same period in the previous year, mainly due the hiring of additional sales staff and the effects of the US dollar exchange rate.
Current assets at September 30, 2015 were $2,555,000, as compared to $2,058,000 in the prior year. Working capital at the end of FY15 was $1,787,000 compared to $1,625,000 at the end of FY14.
Conference Call Details
President and CEO, Andrew Morris, along with Company management, will host a conference call to review financial results and discuss business developments for the period. Details are as below:
|Conference Call Details:|
|Date:||Thursday, December 17, 2015|
|Time:||10:00 a.m. ET|
|Live Call:||1-888-231-8191 (Canada and the United States)|
An archived copy of the conference call will be available for 90 days on the Company website at www.sqidiagnostics.com/about/investors and also at http://event.on24.com/r.htm?e=1107519&s=1&k=C64D95C270DFFC2F048CE807EF3ED066.
Detailed financial statements and the management’s discussion and analysis (MD&A) will also be made available on the Company website at www.sqidiagnostics.com and at www.sedar.com.
Investor Relations Contact:
Chief Executive Officer
416.674.9500 ext. 229
Chief Financial Officer
Lennie Ryer CPA, CA
416.674.9500 ext. 241
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.
This press release contains certain statements including, without limitation, the words “may”, “plan”, “will”, “estimate”, “continue”, “anticipate”, “intend”, “expect”, “believe”, “in the process”, “benefits”, “leading to”, “position” “possible”, “is subject to” and other similar expressions which may constitute “forward-looking statements” within the meaning of applicable securities laws. Forward-looking statements reflect the Company's current expectations and assumptions, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. Readers are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements involve risks and uncertainties including, but not limited to: our ability to market and sell our products including our novel multiplexing technologies and detection platforms; our ability to maintain any technical or product advantages; 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 consumable kits; adverse changes in general economic conditions; international risk and currency exchange fluctuations; competitor activity; technology changes; regulatory approvals and the impact of healthcare reform legislation; and, SQI's ability to raise additional funds in the future.
Such statements, risks and uncertainties are detailed in the Company’s ongoing filings with the securities regulatory authorities, and are available to the public at www.sedar.com. 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 securities laws.