SQI Announces Closing of First Tranche of Previously Announced Proposed Private Placement

TORONTO--(BUSINESS WIRE)-- SQI Diagnostics Inc. ("SQI" or the "Company") (TSX-V: SQD), a life sciences company that develops and commercializes proprietary technologies and products for advanced microarray diagnostics, announced today it raised gross proceeds of CDN $2.572 million through the first tranche of a non-brokered private placement (the "Private Placement") of 1,469,430 units ("Units") priced at $1.75 per unit.

Each Unit consists of one common share and one common share purchase warrant. Each common share purchase warrant will entitle the holder to purchase one common share at a price of $2.50 for a period of two years from the date of issuance. After giving effect to the issuance of the shares and exercise of warrants of the first tranche of the Private Placement the Company will have 39,219,453 shares outstanding.

In connection with the first tranche of the Private Placement, the Company paid Kingsdale Capital Markets Inc. ("Kingsdale") a cash finder's fee of $154,290 and issued 88,166 compensation warrants entitling Kingsdale to acquire 88,166 Units at a price of $1.75 per Unit and expiring 24 months after the closing of the Private Placement.

As previously announced, the Company intends to complete the second tranche of the non-brokered of the Private Placement issuing up to an aggregate total of 5,142,857 units ("Units"), including the first tranche of the Private Placement, at a price of $1.75 per Unit for total aggregate gross proceeds of up to $9 million, on or about May 18, 2012.

The Private Placement is subject to all necessary regulatory and stock exchange approvals. The securities being issued pursuant to the Private Placement will be subject to a four month hold period in accordance with applicable Canadian securities law.

SQI intends to use the net proceeds to fund the Company's product development and commercialization programs, sales and marketing and for general working capital purposes.

"SQI's enhanced cash position improves its ability to support the Company's customers in the long term and the continued build-out of its portfolio of quantitative IVD autoimmune test panels," said Andrew Morris, Chief Financial Officer of SQI Diagnostics. "We believe that this financing will also enable the Company to focus on its near term Diagnostic Tools and Services ("DxTS") customers and the generation of new product and service revenue opportunities from what we believe to be a strong DxTS sales funnel."

About SQI Diagnostics

SQI Diagnostics is a life sciences company that develops and commercializes proprietary technologies and products for advanced microarray diagnostics. The Company's proprietary microarray tests and fully-automated systems are designed to simplify protein and antibody testing workflow, increase throughput, reduce costs and provide excellent data quality. For more information, please visit www.sqidiagnostics.com. The contents of the Company's website are specifically not incorporated by reference in this press release.

FORWARD-LOOKING INFORMATION

This press release contains certain forward-looking statements, including, without limitation, statements containing the words "may", "plan", "will", "estimate", "continue", "anticipate", "intend", "expect", "believe", "in the process", "is subject to" and other similar expressions which constitute "forward-looking information" within the meaning of applicable securities laws. Forward-looking statements reflect the Company's current expectation and assumptions, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. These forward-looking statements involve risks and uncertainties including, but not limited to the closing of all or any part of the second tranche of the Private Placement, regulatory and stock exchange approval of the Private Placement, our intended use of the proceeds from the Private Placement, our need for additional capital to sustain our business, general economic and market segment conditions, competitor activity, technology changes and regulatory approvals. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks and uncertainties and other risks detailed from time-to-time in the Company's ongoing filings with the securities regulatory authorities, which filings can be found at www.sedar.com. Actual results, events, and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements either as a result of new information, future events or otherwise, except as required by applicable securities laws.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.