Mr. Omar Javaid reports

SPECTRA7 MICROSYSTEMS AND PARADE TECHNOLOGIES, LTD. ENTER INTO DEFINITIVE AGREEMENT FOR SALE OF SUBSTANTIALLY ALL OF SPECTRA7'S ASSETS

Spectra7 Microsystems Inc. has entered into a definitive agreement, effective today, with Parade Technologies Ltd., an arm's-length party and a leading supplier of video display, touch controller and high-speed interface ICs (integrated circuits), under which Parade will acquire substantially all of the assets of Spectra7 and its subsidiaries. The assets include intellectual property (IP), products, designs, inventory and other specified items.

The sale transaction will enable Parade to both continue marketing Spectra7's existing advanced active cable product portfolio and to leverage Spectra7's technology in new high-speed solutions. Parade anticipates that Spectra7's cutting-edge SiGe technology, achieving data speeds of 112 gigabits per second and higher, will provide valuable support for Parade's efforts to expand into high-growth markets such as data centres, AI-powered (artificial intelligence) computing and next-generation consumer electronics. In addition, as part of the acquisition, it is currently anticipated that a significant number of Spectra7's employees will join Parade, ensuring continuity of technical expertise and customer support.

"We are thrilled by this outcome and excited to close this transaction. Spectra7's pioneering work and best-in-class active copper cable products have a great partner in Parade, a powerhouse in the industry. Our customers, partners and industry will benefit tremendously," stated Omar Javaid, chief executive officer of Spectra7.

Purchase price

The purchase price for the assets is $9-million (U.S.) (approximately $12,933,000) in cash. On closing of the sale transaction, Parade shall make a cash payment to Spectra7 equal to the purchase price, less: (i) the bridge loans (as defined below); and (ii) $1.8-million (U.S.) (approximately $2,586,600). The escrow amount shall be deposited into escrow with a third party escrow agent to cover certain potential indemnity claims by Parade until the date that is one year after the closing of the sale transaction. There can be no certainty as to the quantum of the escrow amount to be released.

It is the intention of Spectra7 to distribute all of the net proceeds received from the sale transaction to its shareholders in two special distributions. The first special distribution shall be equal to the proceeds received by Spectra7 at the closing (as defined below) less: (i) transaction costs including legal fees, costs of the special meeting of Spectra7 shareholders to be held to approve the sale transaction, escrow agent fees and fees payable to the TSX Venture Exchange, and applicable broker fees; (ii) accounts payable and any employee severance and bonus costs; (iii) funds used for Spectra7's ordinary course expenses prior to closing; and (iv) funds used by Spectra7 to continue to exist as a public company until on or after the escrow release date. The first special distribution is estimated to be approximately $3.3-million (approximately $4,742,100), or approximately 1.8 cents per share based on the share information below, and is expected to be made within seven days after closing. Assuming no further bridge loans above $750,000 (U.S.) are required and the escrow amount is released in full, the second distribution is estimated to be $1.8-million (approximately $2,586,600), or approximately one cent per share, and is expected to be made at the applicable time that funds are released from the escrow amount.

As of the date of this release, the number of common shares of Spectra7 outstanding (assuming the exercise in full of all of the 112,253,574 outstanding prefinanced warrants but excluding the exercise or conversion of any other outstanding securities of Spectra7 previously issued by Spectra7) is 255,008,208 common shares. Based on the above estimates and the common share amounts noted above, the total special distributions to the Spectra7 shareholders is expected to be approximately $5.1-million (U.S.) (approximately $7,328,700) or approximately 2.8 cents per share. Each special distribution shall be made to the Spectra7 shareholders of record as of the closing date of the sale transaction.

Bridge financing

Concurrently with the execution of the purchase agreement by the parties, Parade has agreed to advance a loan to Spectra7 in the amount of $450,000 (U.S.) (approximately $646,650), with an additional loan in the amount of $300,000 (U.S.) (approximately $431,100) to be advanced on or about March 21, 2025, in order to assist Spectra7 to maintain its operations and carry on its business until closing. The bridge loans: (i) bear interest at the prevailing prime rate; (ii) are secured against certain assets of Spectra7 and its subsidiaries; and (iii) will be credited (including interest) at closing against the purchase price. In the event that the sale transaction is not completed or the purchase agreement is terminated, the bridge loans become immediately payable by Spectra7 to Parade.

Shareholder approval and recommendation of the board of Spectra7

The closing of the sale transaction is subject to various conditions, including the approval of the TSX-V and approval of at least 66-2/3rds per cent of the votes cast by Spectra7 shareholders at the meeting pursuant to the Business Corporations Act (Ontario). The members of the board, after consultation with management and legal and financial advisers, have approved the sale transaction and determined that the sale transaction is in the best interests of Spectra7 and recommend that Spectra7 shareholders vote in favour of the sale transaction at the meeting.

Spectra7 has entered into voting and support agreements with Spectra7 shareholders holding an aggregate of 82,256,012 common shares, representing approximately 57.62 per cent of the issued and outstanding common shares of Spectra7, who have, among other things, agreed to vote their common shares of Spectra7 in favour of the sale transaction.

Additional details relating to the sale transaction, anticipated value and timing of the special distributions and the quantum of applicable transaction expenses will be set out in the management information circular of Spectra7 to be mailed to Spectra7 shareholders in connection with the meeting.

The meeting has been set for April 14, 2025. The sale transaction is expected to close in the second quarter of 2025.

The purchase agreement

Under the terms of the purchase agreement, Parade has agreed to acquire all of the assets. The closing of the sale transaction is subject to a number of customary conditions, including with respect to the truth and accuracy of the parties' representations and warranties and compliance with their respective covenants. A termination fee of $2.5-million (approximately $3,592,500) is payable by Spectra7 to Parade should the sale transaction not close in the event that Spectra7 fails to receive Spectra7 shareholder approval for the sale transaction. Following closing, Spectra7 has agreed not to engage in the business of development, design and sale of semiconductor products, including high-speed analog devices, and not to solicit any customers or clients of the business or employees that were involved in the business for a period of two years following the closing. The purchase agreement may be terminated by either Spectra7 or Parade if the closing does not occur on or before June 30, 2025, provided the terminating party is not then in breach of its covenants, representations or warranties and such breach is the principal cause that the closing has not occurred by the outside date.

Spectra7 has agreed to indemnify Parade for certain specified matters, including breaches of its representations, warranties and covenants in the purchase agreement, and certain other matters, subject to certain customary limitations. In the event an indemnification claim is made by Parade, they will have recourse to the escrow amount.

Craig-Hallum Capital Group LLC and The Benchmark Company LLC acted as financial advisers to Spectra7 in connection with the sale transaction and are together entitled to a transaction fee equal to $1-million (U.S.) (approximately $1,437,000) on closing.

Copies of the purchase agreement and the circular will be filed with Canadian securities regulators and will be available on SEDAR+. Spectra7 shareholders are urged to read the circular and the other relevant materials when they become available as such materials will contain important information regarding the sale transaction.

About Spectra7 Microsystems Inc.

Spectra7 is a leader in high performance analog semiconductors for powering the AI revolution in broadband connectivity markets, hyperscale data centres and spatial computing. Spectra7 is based in San Jose, Calif., with a design center in Cork, Ireland and a technical support location in Dongguan, China.

About Parade Technologies Ltd.

Parade Technologies is a leading supplier of mixed-signal ICs for a variety of popular display and high-speed interface standards used in computers, consumer electronics and display panels. The fabless semiconductor company was founded in 2005 and publicly listed on Taipei Exchange in 2011. Parade's portfolio of IC products serves the growing demand for HDMI, DisplayPort, SATA and USB ICs for display, storage and interface applications. In addition to being a technology innovator, Parade is an active participant and leader in industry-standard-setting organizations.

Parade Technologies Inc., a wholly owned U.S.-based subsidiary of Parade Technologies, is a member of VESA (Video Electronics Standard Association). Parade Technologies Inc. has made key contributions to the development of VESA's DisplayPort digital video interface standard.

Parade leverages its close relationships with market-leading Tier 1 OEMs (original equipment manufacturers) to develop ICs that provide unique system capabilities. Many of the company's devices integrate proprietary technologies that offer superior system signal integrity, advanced system integration and enhanced power efficiency. As a result of the company's "standards plus" design philosophy, Parade ICs have been designed into products offered by nearly every leading computer and display vendor worldwide.

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