Subsequently Closed C$10.7 Million in New Capital in May 2024 Eliminated C$11.7 Million in Convertible Debt SAN JOSE, Calif., May 30, 2024 /CNW/ -- (TSXV:SEV) (OTCQB:SPVNF) Spectra7 Microsystems Inc. ("Spectra7" or the "Company"), a leader in high-performance analog semiconductors for broadband connectivity markets, such as AI networks, hyperscale data centers, and AR/VR, today announced its financial results for the three months ended March 31, 2024. A copy of the interim consolidated financial statements for the three months ended March 31, 2024, and the corresponding management's discussion and analysis (the "MD&A") will be available under the Company's profile on www.sedarplus.ca. Unless otherwise indicated, all dollar amounts in this press release are expressed in US dollars. First quarter 2024 financial highlights First quarter 2024 revenue was $0.8 million, increased from $0.3 million in the fourth quarter 2023 and decreased from $3.1 million in the first quarter 2023. Gross margin1 was 41%, compared to 57% in the preceding quarter and 63% in the prior year first quarter. Non-IFRS operating expenses2 were $2.1 million, decreased from $3.5 million in the fourth quarter 2023 and $2.2 million in the first quarter 2023. Basic and diluted loss per share for the first quarter 2024 was $(0.06), compared with a basic and diluted loss per share of $(0.11) in the fourth quarter 2023 and $(0.03) in the first quarter 2023. EBITDA3 loss for the first quarter was $1.4 million, compared with an EBITDA loss of $3.2M for the fourth quarter 2023 and an EBITDA loss of $70,000 in the first quarter 2023. Subsequent to the first quarter end, the Company completed a non-brokered private placement of units for C$10.7 million in gross proceeds. Additionally, the Company amended its C$11.7 million of existing debentures to provide the Company with the right to convert such debentures into equity securities at its option at any time prior to maturity. The Company effected the forced conversion of the debentures on May 15, 2024, effectively eliminating the Company's long-term debt. Spectra7 remains focused on advancing to commercial orders from top global datacenter customers for its active copper cable products, expected in the second half of 2024.4 "We are pleased to have strengthened our balance sheet and eliminated our long term debt in support of our growth plans," said Raouf Halim, Chief Executive Officer. NOTES: 1 Gross margin is a non-GAAP measure which is computed as revenue less cost of sales divided by revenue. Refer to "Revenue and Gross Margin" in the MD&A and the table below, for reconciliation to measures reported in the Company's interim financial statements.  The table below sets forth the details of revenue and gross margin for the three months ended March 31, 2024 and March 31, 2023. Three Months Ended March 31, (In thousands) 2024 2023 Change $ $ $ % Revenue 816 3,134 (2,318) (74 %) Cost of sales 483 1,172 (689) (59 %) Gross profit 333 1,963 (1,629) (83 %) Gross margin % 41 % 63 % (22 %)   2 Non-IFRS operating expenses is a non-GAAP measure which includes research and development, sales and marketing, general and administrative expenses and depreciation and amortization for capital equipment and right-of-use assets and excludes share-based compensation expense, non-recurring termination costs, interest and related financing costs, change in fair value of warrant liabilities, foreign exchange gain/loss and gain/loss from property and equipment disposal. Refer to "Non-GAAP Measures" in the MD&A and the table below for reconciliation to measures reported in the Company's interim financial statements. in thousands 2022 2023 2024 Jun 30 Sep 30 Dec 31  Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 $ $ $ $ $ $ $ $ Total expenses - IFRS 3,331 2,936 3,210 3,053 3,330 3,086 4,479