Spectra7 Announces Completion of Amendment and Extension of Convertible Debentures

Spectra7 Announces Completion of Amendment

Spectra7 Microsystems Inc. (“Spectra7” or the “Company”), a leading provider of high-performance analog semiconductor products for broadband connectivity markets, today announces that it has received the consent, by extraordinary resolutions of the holders, to amend certain terms of its existing 7% unsecured convertible debentures (the “Debentures”) pursuant to a first supplemental debenture indenture. All dollar amounts referenced in this release are in Canadian dollars.

Pursuant to the first supplemental debenture indenture, the maturity date of the Debentures has been extended 18 months from January 9, 2021 to July 9, 2022, and the conversion price of the principal amount of the Debentures has been reduced from $0.35 per common share to $0.05 per common share until January 9, 2022 and then $0.10 per share until July 9, 2022. In consideration for the amendments, the Company has provided a 10% increase to the outstanding principal obligations of the Debentures with such increased amount not being convertible into common shares. The interest rate on the Debentures is not being amended.

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The first supplemental debenture indenture also amends the Debentures to allow the Company to conduct patent sales or patent secured debt financings without approval of the debentureholders provided that the Company uses 50% of the net proceeds received from such sales or debt financings towards the pro rata repayment of the principal amount of the Debentures and accrued and unpaid interest on such amount with the remaining 50% applied to working capital of the Company. Finally, the Debentures have been amended to include a make-whole interest payment to the maturity date for Debentures that are converted prior to maturity.

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