Spectra7 Microsystems Inc. Announces Closing of $7.92 Million Short Form Prospectus Offering and Concurrent Private Placement

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SAN JOSE, Calif.–(BUSINESS WIRE)–(TSX:SEV) Spectra7 Microsystems Inc. (“Spectra7” or the “Company”) is pleased to announce that it has closed its previously announced best efforts prospectus offering of 65,255,480 units (“Units”) at a price of $0.05 per Unit (the “Issue Price”) for aggregate gross proceeds of $3,262,774 (the “Public Offering”). The syndicate of agents (the “Agents”) for the Public Offering was led by Haywood Securities Inc. (the “Lead Agent”) and included Canaccord Genuity Corp. and Eight Capital.

The Company is also pleased to announce that it has closed its previously announced private placement of 93,176,081 Units at the Issue Price for additional gross proceeds of $4,658,804 (the “Private Placement” and, together with the Public Offering, the “Offerings”), bringing the aggregate gross proceeds to the Company from the Offerings to $7,921,578. The full terms of the Units are set forth in the Company’s press release dated August 9, 2019.

The net proceeds from the Offerings will be used for research and development, interest payment on its outstanding convertible debentures and for working capital and general corporate purposes.

In consideration for the services provided by the Agents in connection with the Public Offering, the Company paid the Agents a commission equal to 6% of the gross proceeds raised under the Public Offering, paid in part by the issuance to the Agents of 2,020,600 Common Shares at the Issue Price and issued to the Agents an aggregate of 4,567,883 non-transferable compensation options (the “Compensation Options”). Each Compensation Option is exercisable into one common share in the capital of the Company (a “Common Share”) at a price per Common Share that is equal to the Issue Price for a period of sixty months from the date of closing of the Public Offering. In connection with the provision of certain financial advisory services, the Company has also paid the Lead Agent a cash advisory fee and issued to the Lead Agent an aggregate of 400,000 Common Shares at the Issue Price and 5,900,000 non-transferable advisory options (the “Advisory Options”). The Advisory Options have the same terms as the Compensation Options.

In consideration for the services provided by certain finders in connection with the Private Placement, the Company issued an aggregate of 2,097,648 Compensation Options, and a cash commission payable by the issuance of 1,797,984 Common Shares at a deemed value equal to the Issue Price.

On August 19, 2019, the TSX approved the Company’s previously announced application for exemption from the shareholder approval requirements in connection with the Private Placement and, as a result, the Company is subject to a remedial delisting review by the TSX. It is routine for the TSX to require any issuer utilizing the financial hardship exemption to be the subject of such review. The Company expects that it will meet the TSX’s continued listing requirements and thus maintain its listing on the TSX.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in the United States nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “1933 Act”), or any state securities laws and may not be offered or sold in the United States unless registered under the 1933 Act and any applicable securities laws of any state of the United States or an applicable exemption from the registration requirements 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 design centers in Cork, Ireland, and Little Rock, Arkansas. For more information, please visit www.spectra7.com.

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, those regarding the Company meeting the continued listing requirements of the TSX, 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.

Contacts

Spectra7 Microsystems Inc.

Sean Peasgood

Investor Relations

647-503-1034

ir@spectra7.com

Spectra7 Microsystems Inc.

Darren Ma

Chief Financial Officer

669-284-3170

pr@spectra7.com

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