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SQI Diagnostics Inc. Closes Second and Final Tranche of Private Placement
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA
Toronto, Ontario
August 27, 2018
SQI Diagnostics Inc. (“SQI” or the “Company”) (TSX-V: SQD; OTCQX: SQIDF),

a life sciences and diagnostics company that develops and commercializes proprietary technologies and products for advanced microarray diagnostics, announces that on August 24, 2018 it completed the second tranche (the “Second Tranche”) of a non-brokered private placement (the “Private Placement”) of 2,516,100 units (“Units”) of the Company at a price of $0.15 per Unit for gross proceeds of approximately $377,000, of which approximately $50,000 has closed in escrow subject to the completion of certain closing conditions which are expected to be satisfied on or about August 27, 2018. Each Unit consists of one common share and one common share purchase warrant. Each common share purchase warrant entitles the holder to purchase one common share at a price of $0.20 for a period of five years from the date of issuance, subject to accelerated expiry in certain circumstances.

The aggregate gross proceeds raised by the Company in connection with the completion of the previously announced first tranche (the “First Tranche”) of the Private Placement, which closed on August 17, 2018, and the Second Tranche is approximately $3.52 million, resulting from the issuance of a total of 23,471,101 Units. In connection with the Private Placement, the Company paid aggregate cash commissions of $14,000 to National Bank Financial on certain proceeds raised from non-insiders.

As previously announced, certain insiders of the Company subscribed for an aggregate of 20,000,001 Units for gross proceeds of $3,000,000 under the Private Placement in connection with the closing of the First Tranche. The issuances of Units to insiders pursuant to the Private Placement are considered related party transactions within the meaning of TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-10”). The Company relied on exemptions from the formal valuation and minority approval requirements in sections 5.5(g) and 5.7(1)(e) of MI 61-101 in respect of insider participation on the basis of financial hardship. The three insiders of the Company each became a “control person” of the Company pursuant to the policies of the TSX Venture Exchange as a result of the closing of the Private Placement. Shareholders of the Company approved the creation of the new control persons at the Company’s annual and special meeting of shareholders held on December 18, 2017.

The Private Placement is subject to all necessary regulatory and stock exchange approvals. The securities issued pursuant to the Second Tranche are subject to a four month and one day hold period expiring on December 25, 2018, in accordance with applicable Canadian securities laws.

SQI intends to use the net proceeds of the Private Placement to fund the Company’s product commercialization and manufacturing programs, for sales and marketing and for general working capital purposes. The Company did not file a material change report in respect of the related party transactions less than 21 days prior to the closing of the Private Placement, which the Company deemed reasonable in the circumstances so as to be able to avail itself of the proceeds of the Private Placement in an expeditious manner.

The securities described herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and accordingly may not be offered or sold within the United States or to “U.S. persons”, as such term is defined in Regulation S promulgated under the U.S. Securities Act (“U.S. Persons”), except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions therefrom. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the Company’s securities to, or for the account of benefit of, persons in the United States or U.S. Persons.

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
Andrew Morris
416.674.9500 ext. 229
amorris@sqidiagnostics.com

Vice President of Finance
Patricia Lie
416.674.9500 ext. 277
plie@sqidiagnostics.com

FORWARD-LOOKING INFORMATION

This news release contains certain forward-looking statements, including, without limitation, statements containing the words “will”, “may”, “expects”, “intends”, “anticipates” 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. The forward-looking statements in this news release include without limitation, statements with respect to the Private Placement and the use of proceeds of the Private Placement. These forward-looking statements involve risks and uncertainties including, but not limited to risks related to the failure to obtain necessary regulatory and stock exchange approvals, general economic and market segment conditions, and international risk and currency exchange risks, 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.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the U.S. Securities Act or any state securities laws and may not be offered or sold within the United States or to U.S. persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

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.