Mr. Morlan Reddock reports

SQI DIAGNOSTICS EXTENDS MATURITY DATE OF PIVOT CREDIT FACILITY AND DEFERRAL OF CERTAIN INTEREST PAYMENTS

SQI Diagnostics Inc. and Pivot Financial have agreed to extend the maturity date of SQI's $8.0-million credit facility with Pivot from April 30, 2023, to July 30, 2023.

As the company previously announced, holders of its $2.09-million principal amount 10 per cent secured debentures dated Jan. 30, 2015, as amended, have agreed to the temporary deferral of all interest payments under the debentures. The holders of the debentures are controlled by certain insiders of SQI who are also control persons of SQI. All deferred interest under the debenture interest deferral will become due upon demand by the holders of the debentures, which demand may not be made earlier than June 1, 2023. The insider lenders have further agreed that demand may not be made earlier than July 31, 2023. All other terms of the credit facility and debentures remain unchanged.

The debenture interest deferral may be considered a related party transaction within the meaning of TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. 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 debenture 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 Feb. 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 financing 50 per cent 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 Feb. 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 $2.09-million on Jan. 30, 2015, and later amended the term of such debentures to Jan. 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 news releases of the company dated Feb. 24, 2022, and Jan. 30, 2020, respectively.

About SQI Diagnostics Inc.

SQI Diagnostics is a leader in the science of lung health. The company develops and manufactures respiratory health and precision medicine tests that run on SQI's fully automated systems. Its 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. The company is driven to create and market life-saving testing technologies that help more people in more places live longer, healthier lives.

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