SQI Diagnostics Reports Results for the Year Ended September 30, 2007



    TORONTO, Jan. 18 /CNW/ - SQI Diagnostics Inc. (TSX-V: SQD), a medical
systems automation company focused on evolving laboratory-based biomarker
testing, today announced its financial results for the year ended
September 30, 2007 and provides an update on corporate events since year end.

    
    Highlights

     -  Shipped SQIDworks(TM) platforms and QuantiSpot(TM) microarray
        consumables to external validation partners, subsequent to year end
     -  Conducted an internal performance study, with results obtained
        subsequent to year end, that demonstrated that SQI Diagnostics'
        automated system generates equivalent results to current
        technologies, while providing substantial time and labour savings
     -  Initiated trading on the TSX Venture Exchange under the symbol SQD
     -  Completed a private placement for gross proceeds of approximately
        $5.7 million
    

    "This past year was marked by positive results from the internal studies,
which validated the performance of our SQiDworks platform and QuantiSpot
Rheumatoid Arthritis assay," said Claude Ricks, CEO of SQI Diagnostics. "We
intend to conduct external validation studies at Mount Sinai Hospital and
Cleveland Clinic, which are expected to be complete in early 2008, after
which, we plan to submit study data for our platform and Rheumatoid Arthritis
assay for regulatory clearance. Through 2008, we also intend to complete
development of our Thrombosis multiplexed panel and launch development of
additional autoimmune assays."

    Financial Results

    On April 26, 2007, the Company completed its Qualifying Transaction and
began trading on the TSX Venture Exchange under the symbol SQD on May 4, 2007.
Financial information for the fiscal year ending September 30, 2007 relates to
operations from December 15, 2006 to September 30, 2007 owing to the prior
year ending at December 14. Upon amalgamation the reporting period fiscal year
end of SQI Diagnostics Inc. changed to September 30. Comparative information
for the year ending 2006 relates to operations for the period from December
15, 2005 to December 14, 2006.
    For the three-month period ended September 30, 2007 the Company incurred
a net loss from operations of $946,214 or $0.05 per share compared with a net
loss of $1,171,998 or $0.07 per share for the three-month period ended
June 30, 2007. For the period from December 15, 2006 to September 30, 2007 the
Company incurred a net loss from operations of $2,956,882 or $0.18 per share
compared with a net loss of $1,652,874 or $0.11 per share for the year ended
December 14, 2006. The increased losses during the 2007 periods were primarily
related to higher development, validation and commercialization expenses with
regard to the Company's assay platform and tests related to the Rheumatoid
Arthritis and Thrombosis diagnostic panels.
    Revenue for the three-month period ended September 30, 2007 was $17,190
compared with $22,230 for the three-month period ended June 30, 2007. Revenue
for the period from December 15, 2006 to September 30, 2007 was $71,550,
compared with $146,864 for the periods from December 15, 2005 to December 14,
2006. The decrease in revenue over the fiscal years is primarily related to
the reduced reliance on consulting revenues, combined with the short fiscal
year in 2007.
    Research and development expenses for the three-month period ended
September 30, 2007 were $682,877 compared with $685,442 for the three-month
period ended June 30, 2007. The decreased research and development expense is
primarily due to a decreased investment in lab consumables and assay raw
materials to support validation studies. Research and development expenses for
the period from December 15, 2006 to September 30, 2007 were $1,849,891
compared with $979,466 for the period periods from December 15, 2005 to
December 14, 2006. The increased expense is primarily related to increased
staffing and activities in the development of the two lead assays.
    General and administrative expenses that include corporate salaries and
related expenses, for the three-month period ended September 30, 2007 totaled
$314,648 compared with $414,359 for the three-month period ended June 30,
2007. The expenses for the period from December 15, 2006 to September 30, 2007
were $917,308 compared with $993,701 for the year ended December 14, 2006.
This difference is primarily due to increased professional consulting fees and
facilities rent.
    At September 30, 2007 the Company had working capital of $3,417,917
compared with $4,384,143 at June 30, 2007.

    About SQI Diagnostics

    SQI Diagnostics is a medical systems automation company focused on
evolving laboratory-based biomarker testing. Using automation and proprietary
miniaturization technologies, SQI Diagnostics significantly improves the
economies of scale for laboratories performing multiple biomarker testing at
high volumes, allowing them to deliver patient results faster using less labor
and fewer resources. SQI Diagnostics' initial products target the $1.4 billion
autoimmune disease market, with initial products for Rheumatoid Arthritis and
Thrombosis scheduled for launch in 2007. SQI Diagnostics is based in Toronto,
Canada. For further information please visit www.sqidiagnostics.com.

    Certain information in this press release is based on beliefs and
assumptions of the Company's senior management and information currently
available to it that may constitute forward-looking information within the
meaning of securities laws. Such statements reflect the current views of the
Company with respect to future events and are subject to certain risks and
uncertainties. Actual results, events, and performance may differ materially.
Readers are cautioned not to place undue reliance on these forward-looking
statements.

    This release was prepared by management of the Company who takes full
    responsibility for its contents. The TSX Venture Exchange has not
    reviewed and does not accept responsibility for the adequacy or accuracy
    of this news release.



    
    SQI Diagnostics Inc.
    (formerly Emblem Capital Inc.)
    Consolidated Balance Sheetes
    -------------------------------------------------------------------------
                                                 September 30    December 14
                                                     2007           2006
    -------------------------------------------------------------------------

    Assets

    Current
      Cash and short-term investments            $  3,399,601   $  1,667,719
      Amounts receivable                              191,662        668,380
      Prepaids and deposits                            83,529         44,019
    -------------------------------------------------------------------------
                                                    3,674,792      2,380,118
    Due from related party                            100,456         97,000
    Property and equipment                          2,379,250      1,257,062
    Patents                                           369,306        264,233
    -------------------------------------------------------------------------
                                                 $  6,523,804   $  3,998,413
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities

    Current
      Accounts payable and accrued liabilities   $    240,364   $    354,315
      Current portion of long-term debt                16,511        134,436
    -------------------------------------------------------------------------
                                                      256,875        488,751
    Long-term debt                                          -         25,708
    -------------------------------------------------------------------------
                                                      256,875        514,459
    -------------------------------------------------------------------------

    Shareholders' Equity

    Capital stock                                  14,113,145      8,514,699

    Warrants                                           89,188              -

    Employee share purchase loan                      (10,000)       (10,000)

    Contributed surplus                             7,790,715      7,738,492

    Deficit                                       (15,716,119)   (12,759,237)
    -------------------------------------------------------------------------
                                                    6,266,929      3,483,954
    -------------------------------------------------------------------------
                                                 $  6,523,804   $  3,998,413
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    SQI Diagnostics Inc.
    (formerly Emblem Capital Inc.)
    Consolidated Statements of Operations and Deficit
    -------------------------------------------------------------------------
                                                  Period From
                                                  December 15,      Year
                                                    2006 to         Ended
                                                 September 30,   December 14,
                                                      2007           2006
    -------------------------------------------------------------------------

    Revenue
      Consulting fees                            $     71,550   $    146,684
    -------------------------------------------------------------------------

    Expenses
      Salaries and wages                              391,602        521,314
      General and administrative                      228,807        224,214
      Professional and consulting fees                296,899        248,173
      Stock-based compensation                         52,223        268,589
      Research and development costs                1,849,891        368,466
      Interest income                                 (64,539)       (74,391)
      Amortization - patents                           64,937         62,868
      Amortization - property and equipment           208,612        180,325
    -------------------------------------------------------------------------
                                                    3,028,432      1,799,558
    -------------------------------------------------------------------------

    Net loss                                       (2,956,882)    (1,652,874)

    Deficit at beginning of period                (12,759,237)   (11,106,363)
    -------------------------------------------------------------------------

    Deficit at end of period                     $(15,716,119)  $(12,759,237)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average number of shares              16,619,481     14,719,314
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted loss per share             $      (0.18)  $      (0.11)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    SQI Diagnostics Inc.
    (formerly Emblem Capital Inc.)
    Consolidated Statements of Cash Flows
    -------------------------------------------------------------------------
                                                  Period From
                                                  December 15,      Year
                                                    2006 to         Ended
                                                 September 30,   December 14,
                                                      2007           2006
    -------------------------------------------------------------------------

    Cash flows from (used in) operating
     activities
      Loss for the period                        $ (2,956,882)  $ (1,652,874)
      Add items not affecting cash
        Amortization - patents                         64,937         62,868
                     - property and equipment         208,612        180,325
        Stock-based compensation                       52,223        268,589
        Interest accrual                               (3,456)             -
    -------------------------------------------------------------------------
                                                   (2,634,566)    (1,141,092)
      Changes in non-cash working capital items
        Amounts receivable                            476,718       (297,757)
        Prepaids and deposits                         (39,510)       (29,976)
        Accounts payable and accrued liabilities     (125,290)       (67,015)
    -------------------------------------------------------------------------
                                                   (2,322,648)    (1,535,840)
    -------------------------------------------------------------------------

    Cash flows used in investing activities
      Purchase of property and equipment           (1,330,800)      (483,192)
      Additions to patents                           (170,010)       (29,776)
      Short-term investments                       (2,150,000)    (1,000,000)
    -------------------------------------------------------------------------
                                                   (3,650,810)    (1,512,968)
    -------------------------------------------------------------------------

    Cash flows from financing activities
      Advances (repayment) of long term debt         (143,633)       125,144
      Repayment of amount due to related parties            -       (200,000)
      Proceeds of convertible debentures, net of
       issue costs                                          -      3,692,493
      Proceeds from private placement and exercise
       of warrants, net of share issuance costs     5,092,064              -
      Cash acquired on reverse takeover               606,909              -
    -------------------------------------------------------------------------
                                                    5,555,340      3,617,637
    -------------------------------------------------------------------------

    Increase (decrease) in cash during the period    (418,118)       568,829
    Cash at beginning of period                       667,719         98,890
    -------------------------------------------------------------------------

    Cash at end of period                        $    249,601   $    667,719
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplemental Disclosure
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Cash paid for interest                       $          -   $      5,589
    

    %SEDAR: 00021000E




For further information:

For further information: Chief Financial Officer, Andrew Morris, (416)
674-9500 ext. 229, amorris@sqidiagnostics.com; Investor Relations, James
Smith, (416) 815-0700 ext. 229, jsmith@equicomgroup.com


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