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Spectra7 Announces Closing of Convertible Debenture Unit Financing

Reporter: Newswire

 Spectra7 Announces Closing of Convertible Debenture Unit Financing

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NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OF DISSEMINATION IN THE UNITED STATES TORONTO, Sept. 15, 2023 /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, is pleased to announce the closing of its previously announced private placement to certain institutional investors and insiders of the Company (the "Private Placement") of 2,838 units of the Company (each, a "Unit") at a price of $1,000 per Unit for gross proceeds of $2,838,000.

Each Unit consists of one 9.0% unsecured convertible debenture of the Company (each, a "Debenture" and, collectively, the "Debentures") in the principal amount of $1,000, and 1,538 common share purchase warrants of the Company (each, a "Warrant" and, collectively, the "Warrants"). All dollar amounts in this press release are expressed in Canadian dollars. "This convertible debenture raise will help us expand our working capital capacity to drive expected future revenue growth and other growth-related needs" said Raouf Halim, Chief Executive Officer. Information regarding the Private Placement including the terms of the Debentures and Warrants is set out in the Company's press release dated September 13, 2023.

Copies of the debenture indenture governing the Debentures and other pertinent closing documents will be filed by the Company on its SEDAR+ profile at A.G.P./Alliance Global Partners (the "Agent") acted as the exclusive placement agent for the Private Placement. The Agent received a cash commission of approximately $175,000 and warrants (the "Agent Warrants") entitling the Agent to purchase up to 154,184 common shares ("Common Shares") of the Company at a price of $0.65 per Common Share for the period commencing on the date that is six months after the closing date until the second anniversary of the closing date (the "Exercise Period").

The expiry date of the Agent Warrants can be accelerated by the Company if, at any time during the Exercise Period, the closing price of the Common Shares on the TSX Venture Exchange ("TSXV") is greater than $4.00 for any 10 non-consecutive trading days. The Company also paid to an arm's length party in connection with the Private Placement finder's fees of $19,500 and issued such party finder's warrants to purchase up to 29,989 Common Shares on the same terms as the Agent Warrants. Pursuant to Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"), the Offering constitutes a "related party transaction" as insiders of the Company subscribed for a total of 314 Units for gross proceeds of $314,000.

The Company is relying on exemptions from the formal valuation and minority approval requirements of MI 61-101, as neither the fair market value of the Debentures, nor the consideration paid, exceeded 25% of the Company's market capitalization. The Company did not file a material change report more than 21 days before the closing of the Private Placement as the details of the related parties' participation in the Private Placement had not been settled.

The Private Placement was approved by all of the independent directors of the Company. No securities regulatory authority has either approved or disapproved of the contents of this news release. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

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 a technical support location in Dongguan, China. For more information, please visit . Contacts: Matt Kreps Darrow Associates 214-597-8200 [email protected] Spectra7 Microsystems Inc. Bonnie Tomei Chief Financial Officer 669-212-1089 [email protected] CAUTIONARY NOTES Certain statements contained in this press release constitute "forward-looking statements", including the Company's intended use of proceeds from the Private Placement.

All statements other than statements of historical fact contained in this press release, including, without limitation, 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 the risk factors discussed in the Company's management's discussion and analysis for the year ended December 31, 2022. 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. Neither the TSXV nor its Regulation Service Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release. SOURCE Spectra7 Microsystems Inc.

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