Spectra7 closes financing tranche, concurrent offering
2021-05-14 18:23 ET - News Release
Mr. David Mier reports
SPECTRA7 ANNOUNCES CLOSING OF $5.5 MILLION PRIVATE PLACEMENT
Spectra7 Microsystems Inc. has closed the first tranche of its brokered private placement, led by Cormark Securities Inc., as sole agent and bookrunner. The first tranche of the Private Placement consisted of the issuance of 170,689,567 units (the "Units") at a price of $0.03 per Unit. The Company also completed a concurrent non-brokered offering of 12,700,800 Units. In aggregate, the gross proceeds to the Company from the Private Placement and the non-brokered offering were approximately $5.5 milllion.
All dollar amounts in this news release are denominated in Canadian dollars.
Each Unit consists of one common share in the capital of the Company (each, a "Common Share") and one common share purchase warrant (each, a "Warrant") with each Warrant being exercisable into one Common Share at an exercise price of $0.05 for a period of five years until May 14, 2026, subject to adjustment upon certain customary events. The expiry date of the Warrants can be accelerated by the Company to the date that is thirty (30) days following the delivery of the acceleration notice to the holders of the Warrants if, at any time following the date that is four months and one day following the closing date of the Private Placement, the closing price of the Common Shares is greater than $0.08 for a period of 10 non-consecutive trading days on the TSXV.
The Agent received a commission equal to 7% of the aggregate proceeds raised in the Private Placement , and broker warrants entitling the Agent to purchase such number of Units as is equal to 7% of the aggregate of number of Units issued in the Private Placement at the issue price for a period of two years from closing.
The net proceeds from the Private Placement are intended to be used for working capital to support revenue growth, the payment of interest on its outstanding convertible debentures and for general corporate purposes.
Insiders of the Company participated in the first tranche of the Private Placement for an aggregate amount of $381,440. 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.
All securities issued in the Private Placement are subject to statutory and Exchange hold periods until the date that is four months and one day from the date of issuance.
The second tranche of the Private Placement is expected to close on or about June 4, 2021.
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 technical support location in Dongguan, China. For more information, please visit www.spectra7.com.
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