Spectra7 Announces Term Sheet for Asset Based Senior Secured Note Loan Facility

SAN JOSE, Calif.–(BUSINESS WIRE)–Spectra7 Microsystems Inc. (TSX:SEV) (“Spectra7” or the “Company”),
a leading provider of high-performance analog semiconductor products for
broadband connectivity markets, today announced that it has entered into
a non-binding term sheet with respect to a US$12.0 million senior
secured note loan facility.

Pursuant to the term sheet, the facility is to be secured against the
Company’s patent portfolio and various other intellectual property
rights. The facility shall bear interest at a rate of 11.25% plus an
annual fee of up to US$250,000 per annum based on the Company’s
revenues. At the option of the Corporation, payment of interest may be
deferred until maturity. The facility will have a three year term with
the Company having a right to two one year extensions upon certain
conditions. Upon closing of the facility, the Company shall issue
warrants to the note holders to purchase up to 5% of the fully diluted
common shares in the capital of the Company at an exercise price equal
to a 15% premium to the 10-day volume weight average share price at the
time of closing.

The proceeds of the facility are intended to be used for the repayment
of the Company’s existing indebtedness and for working capital purposes.

Closing of the facility is subject to various conditions precedent
including entering into legally binding documentation, satisfactory due
diligence, the completion of a minimum equity financing and the approval
of the Toronto Stock Exchange. The Company expects to close the facility
in Q3 2019.


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 design centers in Markham, Ontario, Cork, Ireland, and
Little Rock, Arkansas. For more information, please visit www.spectra7.com.


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, those regarding the Company’s future financial position and
results of operations, strategy, proposed acquisitions, 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 annual MD&A for the year ended
December 31, 2018. 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:

Spectra7 Microsystems Inc.
Sean Peasgood
Investor Relations

Spectra7 Microsystems Inc.
Darren Ma
Chief Financial Officer

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