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Spectra7 Announces Minimum $6 Million Brokered Private Placement

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SAN JOSE, Calif., Oct. 7, 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 sell, on a brokered private placement basis, in one or more tranches, common shares of the Company (the "Common Shares") at a price of $1.32 per Common Share for gross proceeds of a minimum of $6 million (the "Private Placement"). All dollar amounts in this news release are denominated in Canadian dollars unless otherwise indicated.

(PRNewsfoto/Spectra7 Microsystems Inc.)
(PRNewsfoto/Spectra7 Microsystems Inc.)

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 received significant expressions of interest to participate in a private placement from insiders and certain outside investors. 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 and the Company's ability to obtain the necessary approvals and complete the Private Placement, that the Private Placement will be for minimum gross proceeds of $6 million 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.

For more information, please contact:

Matt Kreps/Jim Fanucchi
Darrow Associates
214-597-8200
ir@spectra7.com

Spectra7 Microsystems Inc.
Bonnie Tomei
Chief Financial Officer
669-212-1089
ir@spectra7.com

Spectra7 Microsystems Inc.
John Mitchell
Public Relations
650-269-3043
pr@spectra7.com

SOURCE Spectra7 Microsystems Inc.

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