SQI Diagnostics Inc. announced that the Company's board of directors 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 (the "Act"). 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, the Company does not currently have sufficient cash to repay its Indebtedness owing to Pivot under the terms of the credit agreement entered into between Pivot and the Company dated February 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 cooperatively 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. As at the date of the Notice, the Company has approximately $8,790,000 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 February 11, 2022, as amended.