NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR RELEASE, PUBLICATION, DISTRIBUTION OR DISSEMINATION DIRECTLY, OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES.

SAN JOSE, CA – June 27, 2017 – (TSX:SEV) Spectra7 Microsystems Inc. (“Spectra7” or the “Company”) is pleased to announce that it has closed its previously announced bought deal offering of 11,500,000 units (“Units”) at a price of $0.40 per Unit, including the full exercise of the over-allotment option, for aggregate gross proceeds of $4,600,000 (the “Public Offering”). The Public Offering was underwritten by a syndicate of underwriters led by Canaccord Genuiy Corp. and including Eight Capital and Echelon Wealth Partners Inc. (the “Underwriters”). In addition to the Public Offering, the Company also announces it has closed the first tranche of its private placement of Units previously announced on June 7, 2017 (the “Private Placement” and, together with the Public Offering, the “Offerings”) pursuant to which it has issued 3,280,750 Units for additional gross proceeds of $1,312,300, including subscriptions by the CEO and certain directors of the Company.

Each Unit issued pursuant to the Offerings consists of one common share of the Company (“Common Share”) and one-half of one common share purchase warrant (each whole warrant, a “Warrant”). Each Warrant entitles the holder to acquire one Common Share at an exercise price of $0.55 per Common Share for a period of two years following the closing of the Offerings. The expiry date of the Warrants may be accelerated by the Company at any time if the volume weighted average trading price of the Common Shares on the facilities of the Toronto Stock Exchange (or such other exchange on which the Common Shares trade) is greater than $0.85 for any 10 consecutive trading days following the date that is four months and one day after the issuance of the Warrants. The securities issued pursuant to the Private Placement are subject to a statutory hold period of four months and one day in accordance with applicable Canadian securities law.

In consideration for the services provided by the Underwriters, the Company paid the Underwriters a cash commission and issued an aggregate of 690,000 non-transferable compensation options to the Underwriters (the “Compensation Options”). Each Compensation Option is exercisable into one Common Share at a price of $0.40 for a period of 24 months from the date hereof.

The net proceeds from the Offerings will be used for research and development and for working capital and general corporate purposes. Certain directors and officers of the Company purchased Units pursuant to the Private Placement. 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 subscribed for Units. The Company is relying on exemptions from the formal valuation and minority approval requirements of MI 61-101. The Private Placement was approved by all of the independent directors of the Company.

AMENDMENTS TO LOAN FACILITY AND ISSUANCE OF WARRANTS

In addition to the above, the Company also announces the effectiveness of certain amendments to its US$6,500,000 senior secured term loan facility with MidCap Financial (the “Loan Facility”). The amendments, among other things, (i) extend the commencement date for principal payments under the Loan Facility from June 1, 2017 to June 1, 2018, and (ii) provide the Company with the option to extend the maturity date of the Loan Facility by one year upon satisfaction of certain conditions precedent (together, the “Amendments”). In consideration for entering into the Amendments, the Company has issued warrants to purchase up to 750,000 Common Shares (the “Amendment Warrants”) with each Amendment Warrant being exercisable for a period of five years from the date of issuance into one Common Share at an exercise price of $0.39, subject to adjustment in certain circumstances.

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 broadband 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.

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’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, 2016. 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.



Contact:

Spectra7 Microsystems Inc. 
Sean Peasgood 
Investor Relations 
416-565-2805 
Email Contact

Spectra7 Microsystems Inc. 
Dave Mier 
Chief Financial Officer 
925-858-7011 
Email Contact