Mr. Raouf Halim reports

SPECTRA7 ANNOUNCES CLOSING OF CONVERTIBLE DEBENTURE UNIT FINANCING

Spectra7 Microsystems Inc. has closed its previously announced private placement, to certain institutional investors and insiders of the company, of 2,838 units of the company at a price of $1,000 per unit for gross proceeds of $2,838,000. Each unit consists of one 9 per cent unsecured convertible debenture of the company in the principal amount of $1,000, and 1,538 common share purchase warrants of the company.

"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 Sept. 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.

Alliance Global Partners (AGP) acted as the exclusive placement agent for the private placement. The agent received a cash commission of approximately $175,000 and warrants entitling the agent to purchase up to 154,184 common shares of the company at a price of 65 cents 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 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 is greater than $4 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, 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 per cent 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.

About Spectra7 Microsystems Inc.

Spectra7 Microsystems 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 centres and other connectivity markets. Spectra7 is based in San Jose, Calif., with a design centre in Cork, Ireland, and a technical support location in Dongguan, China.

We seek Safe Harbor.