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Spectra7 Announces Increase in Size of Brokered Private Placement to $12 Million

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/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES./

SAN JOSE, Calif., Oct. 15, 2021 /CNW/ - (TSXV: SEV) (OTCQB: SPVNF) Spectra7 Microsystems Inc. ("Spectra7" or the "Company"), a leading provider of high-performance analog semiconductor products for broadband connectivity markets, announces that it intends to increase the size of the Company's previously announced brokered private placement to $12 million (the "Private Placement"). The Private Placement will consist of the issuance of approximately 9,090,909 common shares (the "Common Shares") at a price of $1.32 per Common Share. All dollar amounts in this news release are denominated in Canadian dollars unless otherwise indicated.

The Company has engaged Cormark Securities Inc. (the "Agent") to offer the Common Shares for sale on a best efforts agency basis. The Agent is entitled to receive a cash commission equal to 6% of the aggregate proceeds raised in the Private Placement (excluding proceeds raised from investors on the president's list) and broker warrants entitling the Agent to purchase such number of Common Shares as is equal to 6% of the aggregate of number of Common Shares issued in the Private Placement (excluding Common Shares issued to investors on the president's list) at $1.32 per Common Share for a period of two years from the closing.

The Company has granted the Agent a 10% over-allotment option to offer an additional 909,091 Common Shares for sale, exercisable in whole or in part at any time up until closing of the Private Placement. In the event that the over-allotment option is exercised in full, the aggregate gross proceeds of the Private Placement will be $13.2 million.

"Investor response to our Private Placement significantly exceeded our expectations, including both U.S. and Canadian investors, and we elected to upsize the transaction to approximately $12 million. The additional working capital will enable us to further increase production at our semiconductor foundries and meet rising customer demand at this exciting inflection point for our Active Copper Cable solutions" said Raouf Halim, Chief Executive Officer of Spectra7. "As customer orders continue to accelerate beyond the US$7.2 million reported at the start of the fourth quarter, our revenue visibility extends well into 2022. I have never been more confident in our business outlook and believe that the future is bright for Spectra7."

The Private Placement is expected to close on or about October 26, 2021. The net proceeds from the Private Placement are intended to be used for working capital to support revenue growth and for general corporate purposes.

Pursuant to Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"), the Private Placement constitutes a "related party transaction" as insiders of the Company are expected to subscribe for up to 25% of the Common Shares to be sold in the Private Placement. The Company is relying on exemptions from the formal valuation and minority approval requirements of MI 61-101. The Company did not file a material change report more than 21 days before the expected closing of the Private Placement as the details of the related parties' participation in the Private Placement have not been settled.

The closing of the Private Placement is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange.

This news release does not constitute an offer to sell or the solicitation of an offer to buy 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 in the United States or to U.S. Persons unless registered under the U.S. Securities Act and any applicable state securities laws or an exemption from such registration is available.

ABOUT SPECTRA7 MICROSYSTEMS INC.

Spectra7 Microsystems Inc. is a high performance analog semiconductor company delivering unprecedented bandwidth, speed and resolution to enable disruptive industrial design for leading electronics manufacturers in virtual reality, augmented reality, mixed reality, data centers and other connectivity markets. Spectra7 is based in San Jose, California with a design center in Cork, Ireland and technical support location in Dongguan, China. For more information, please visit www.spectra7.com.

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

CAUTIONARY NOTES

Certain statements contained in this press release constitute "forward-looking statements". All statements other than statements of historical fact contained in this press release, including, without limitation, the anticipated closing date, the Company's anticipated use of proceeds, the participation by insiders, the Company's ability to obtain the necessary approvals and complete the Private Placement in whole or in part, and the Company's strategy, plans, objectives, goals and targets, and any statements preceded by, followed by or that include the words "believe", "expect", "aim", "intend", "plan", "continue", "will", "may", "would", "anticipate", "estimate", "forecast", "predict", "project", "seek", "should" or similar expressions or the negative thereof, are forward-looking statements. These statements are not historical facts but instead represent only the Company's expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed, implied or forecasted in such forward-looking statements. Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to a decision to complete the Private Placement for gross proceeds of less than $6 million and the risk factors discussed in the Company's Management's Discussion and Analysis for the year ended December 31, 2020. Management provides forward-looking statements because it believes they provide useful information to investors when considering their investment objectives and cautions investors not to place undue reliance on forward-looking information. Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. These forward-looking statements are made as of the date of this press release and the Company assumes no obligation to update or revise them to reflect subsequent information, events or circumstances or otherwise, except as required by law.

SOURCE Spectra7 Microsystems Inc.

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View original content: http://www.newswire.ca/en/releases/archive/October2021/15/c1324.html

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