Mr. Morlan Reddock reports

SQI DIAGNOSTICS ANNOUNCES RECEIPT OF INTENTION TO ENFORCE SECURITY FROM PIVOT FINANCIAL AND ANTICIPATED VOLUNTARY BANKRUPTCY FILING

SQI Diagnostics Inc. has received a notice of intention to enforce security issued by its senior secured creditor, Pivot Financial I Limited Partnership, under Section 244(1) of the Bankruptcy and Insolvency Act.

As previously announced, there has been significant doubt about the company's ability to continue as a going concern for several months. As at the date of this news release, the company does not currently have sufficient cash to repay its indebtedness (as defined below) owing to Pivot under the terms of the credit agreement entered into between Pivot and the company dated Feb. 11, 2022, as amended, and the board does not expect to be able to raise sufficient capital in the short term to repay the indebtedness by the deadline noted in the notice. Further, the board believes that it has exhausted all feasible options to continue the company as a going concern and/or repay the indebtedness and that it is now in the best interest of the company and its stakeholders to work co-operatively with Pivot. As such, while the enforcement of the notice is subject to a 10-day notice period, the board has made the decision to consent to the early enforcement of security by Pivot. As a result of providing such consent, the board has also received a foreclosure notice from Pivot under Section 65(2) of the Personal Property Security Act (Ontario) in connection with the enforcement of Pivot's security under the credit agreement. The company will proceed with a voluntary assignment in bankruptcy pursuant to the provisions of the act and upon completion of the filing will announce that such filing is complete and that a trustee has been formally retained.

In connection with the anticipated filing under the act, the remaining members of the board, including each of Gerald Connor, Clive Beddoe, Wilmot Matthews, Claude Ricks and Eric Zwisler, and the company's sole remaining executive officer, Morlan Reddock, chief financial officer, will tender their resignations as directors or officers of the company effective immediately upon completion of the filing.

As at the date of the notice, the company has approximately $8.79-million owing to Pivot, inclusive of $8-million of principal and accrued and unpaid interest, fees, legal expenses and disbursements under the terms of the credit agreement. Of the indebtedness, an aggregate of approximately $3.75-million of principal, excluding accrued and unpaid interest, is owing to the three insider directors of the company, who are also control persons of the company, who participated in the credit facility under the terms of certain participation agreements dated Feb. 11, 2022, as amended. The decision to issue the notice was made solely by Pivot, as the insider indebtedness is subordinate to Pivot's interest in the indebtedness and Pivot retained all decision-making authority pursuant to the terms of the participation agreements.

The company also confirms that it has been in discussions with the TSX Venture Exchange in connection with its proposed filing under the act and that it expects its common shares to continue to be halted from trading on the exchange following this announcement and ultimately suspended and delisted following completion of the filing.

We seek Safe Harbor.