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SQI Diagnostics Raises $4.6M to Fund Development of New Tests, Services

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SQI Diagnostics announced last week that it has raised C$4.6 million ($4.6 million). The Toronto-based molecular diagnostics company raised the funds in a non-brokered private placement of about 2.3 million units priced at roughly C$2 per unit, where each unit consisted of a common share and a purchase warrant.

SQI said it intends to use the net proceeds to fund its product development and commercialization programs, sales and marketing, and for general working capital purposes.

In connection with the placement, SQI paid Kingsdale Capital Markets a finder's fee of $276,000, equal to 6 percent of the gross proceeds. SQI also issued the Canadian investment firm compensation warrants exercisable for 24 months from the closing of the private placement to purchase 85,040 units.

The placement is subject to all necessary regulatory and stock exchange approvals, the firm said.

Chief Financial Officer Andrew Morris said in a statement that the financing "improves our ability to support our customers in the long term," and supports the continued development of its quantitative in vitro diagnostics for conditions such as vasculitis, lupus, Crohn's disease, and ulcerative colitis.

The company is developing all of its tests to run on its array-based SQiDworks platform. It currently sells two US Food and Drug Administration-cleared tests: IgXplex RA, which is designed to help physicians diagnose and monitor patients with rheumatoid arthritis; and the IgXPlex celiac qualitative assay for anti-tissue transglutaminase IgG and IgA.

Morris added that SQI is in the process of launching a new business unit called Dx Tools and Services that will target "new product and service revenue opportunities for co-developed" original equipment manufacturer products and laboratory-developed test products, "which we believe could accelerate our revenue ramp."

SQI earlier this month abandoned its bid to acquire Berlin-based array tools firm Scienion. The company had hoped to buy Scienion for $15.6 million, but was unable to raise enough funds to complete the transaction. The company also pulled its initial public offering in the US, citing "current market conditions" (BAN 10/11/11).

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