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June 13th, 2024 TORONTO, ON - (CISION NewsWire) – (TSXV:SEV) (OTCQB:SPVNF) Spectra7 Microsystems Inc. (“Spectra7” or the “Company”), a leader in high-performance analog semiconductors for broadband connectivity markets, such as AI networks, hyperscale data centers, and AR/VR, is pleased to announce it has closed the second tranche of its previously announced non-brokered private placement (the "Private Placement") to certain institutional investors and other investors of the Company (the “Subscribers”) of units ("Units"), with each Unit consisting of either: (i) one common share (each a "Common Share") and one common share purchase warrant (each a "Warrant"); or (ii) if the Share Ownership Threshold (defined below) would be exceeded by a Subscriber as a result of their subscription for Units or a Subscriber otherwise elects, one pre-funded common share purchase warrant (each, a “Pre-Funded Warrant”) and one Warrant, at a purchase price of $0.10 per Unit (the “Offering Price”). The Company issued 18,311,453 Units for aggregate gross proceeds of approximately $1,831,145 in the second tranche of the Private Placement.

The total gross proceeds from the two tranches of the Private Placement is approximately $12.6 million. The net proceeds of the Private Placement are expected to be used for working capital and general corporate purposes.

Each Warrant is exercisable immediately and entitles the holder thereof to purchase either: (i) one Common Share; or (ii) if the Share Ownership Threshold would be exceeded by a Subscriber as a result of the exercise of their Warrants, one Pre-Funded Warrant, at an exercise price of $0.11 per Common Share or Pre-Funded Warrant until June 13, 2029. The expiry date of the Warrant can be accelerated by the Company at any time prior to the expiry date of the Warrants if the closing price of the Common Shares on the TSX Venture Exchange (the “TSXV”) is greater than $0.33 for any period of 10 consecutive trading days and certain volume trading thresholds are met during those 10 consecutive trading days. Each Pre-Funded Warrant entitles the holder to purchase one Common Share for a nominal amount subject to compliance with the Share Ownership Thresholds. The Pre-Funded Warrants do not expire.

The “Share Ownership Threshold” is (i) 9.99% of the number of Common Shares outstanding; or (ii) if the relevant Subscriber or holder has filed and the TSXV has cleared for acceptance a personal information form in the form prescribed by the TSXV, 19.99% of the number of Common Shares outstanding; provided, however, that the 19.99% threshold shall apply if the requisite disinterested shareholder approval has been obtained in accordance with applicable TSXV policies.

Craig-Hallum Capital Group (the “Agent”) acted as the sole placement agent for the second tranche of the Private Placement for purchasers in the United States. The Agent received a cash commission of US$70,000 and compensation warrants on substantially the same terms as the Warrants, entitling the Agent to purchase up to 682,462 Common Shares at an exercise price of $0.11 per Common Share until June 13, 2029. The compensation warrants are not exercisable for Pre-Funded Warrants and are non-transferable. Richardson Wealth Ltd. also received a cash finder’s fee equal to $8,400 with respect to certain Canadian purchasers.

All dollar amounts in this news release are denominated in Canadian dollars unless otherwise specified.

The Private Placement is subject to receipt of final approval by the TSXV. In the United States, the Units were issued on a private placement basis pursuant to exemptions from the registration requirements of the United States Securities Act of 1933, as amended (the "U.S. Securities Act"). No securities regulatory authority has either approved or disapproved of the contents of this news release. Securities offered in the second tranche of the Private Placement and sold in Canada are subject to a statutory four month resale restriction under National Instrument 45-102 – Resale of Securities, and, if applicable, a four month hold period under the policies of the TSXV, which expires on October 14, 2024. This news release is not an offer to sell or the solicitation of an offer to buy the securities in the United States or in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to qualification or registration under the securities laws of such jurisdiction, 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. The securities being offered have not been, nor will they be, registered under the U.S. Securities Act, and such securities may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from U.S. registration requirements and applicable U.S. state securities laws.

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.

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.

CAUTIONARY NOTES

Certain statements contained in this press release constitute "forward-looking statements" or “forward-looking information” (collectively, “forward-looking statements”) under applicable securities laws in the United States and Canada. All statements other than statements of historical fact contained in this press release, including, without limitation, 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. Forward looking statements in this press release include, but are not limited to the ability of the Company to obtain the final approval of the TSXV for the second tranche of the Private Placement, the use of proceeds for the Private Placement, and the Company’s ability to support hyperscaler customer needs. 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, including, but not limited to, the risk that the Company is not being able to obtain the necessary regulatory or stock exchange approvals for closing of the second tranche of the Private Placement, the proceeds of the Private Placement being insufficient for the Company’s needs, or being used in a manner other than as disclosed herein. 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, 2023. 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
Darrow Associates
214-597-8200
ir@spectra7.com

Spectra7 Microsystems Inc.
Ron Pasek
Chair of the Board of Directors
408-710-6462
ronpasek@yahoo.com

Spectra7 Microsystems Inc.
Dave Mier
Interim Chief Financial Officer
925-858-7011
ir@spectra7.com

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