Embedded Products Drive Order Book Growth as Company Targets Next High Growth Segment

OCTOBER 7, 2015 Palo Alto, CA and Toronto, ON – (TSX:SEV) Spectra7 Microsystems Inc. (“Spectra7” or the “Company”) is pleased to announce that it achieved confirmed orders or “bookings” of US$2.5 million during the third quarter of 2015, representing a record for the Company and an increase of 85% from the prior quarter bookings of US$1.4 million. A majority of this growth is driven by bookings for the Company’s high performance embedded products. Revenue for the third quarter of 2015 is expected to be approximately US$0.9 million, yielding a book to bill ratio of 2.78 versus an industry average of 1.06. The Company expects to report its financial results for the three and nine months ended September 30, 2015 on or about November 16, 2015.

“Spectra7’s record bookings reflect the unique value of the Company’s products, technology and business model across a growing range of high growth market segments including virtual reality, augmented reality, wearable computing and consumer electronics,” said Tony Stelliga, CEO of Spectra7.

According to Digi-Capital’s April 2015 report, the AR market is projected to generate $120 billion in revenue in 2020, in addition to the $30B in revenue for the Virtual Reality (“VR”) market which is already addressed by the Company’s previously announced VR product line. In Digi-Capital’s report, Tim Merel stated, “Augmented reality has the potential to play the same role in our lives as smartphones with hundreds of millions of users. You could wear it anywhere, doing anything”. He went on to say “Augmented reality is like wearing a transparent mobile phone on your face. We think AR could fundamentally disrupt mobile”.

Over a dozen consumer OEMs have entered and/or invested in the AR market as they seek to capitalize on the new opportunity for content distribution, training, gaming and advertising. AR allows the user to continue to experience the real world through ‘glasses’ while ‘overlaying’ sensor driven events and heads up images, applications, objects and game characters into the user’s real world. Spectra7 is also a leading provider of high performance interconnects to the Virtual Reality market where the user is immersed into the VR experience through a dedicated display panel integrated into the Head Mounted Display (“HMD”).

AR-Connect™ enables Augmented Reality glasses to connect to a Smart-phone, proprietary processing device or a desktop GPU/Laptop Processing unit, with a single unified and ultra thin link. Interconnect weight, diameter, speed and low distortion are critical to AR interconnects. Spectra7’s AR-Connect™ interconnects enable Original Equipment Manufacturers (“OEM”) to meet these design goals with the Company’s patented embedded high speed active signal processing technology. The Company’s technology delivers a dramatic reduction in the number of cables required by up to a factor of four, increases video throughput by up to 100% and enables up to a 10X increase in sensor/gesture backhaul data throughput while simultaneously reducing the cable conductor cross sectional area by up to 90% compared to discreet, passive interconnects.

“Spectra7 continues its expansion into high growth vertical markets, and Augmented Reality is a superb fit,” said Tony Stelliga, CEO of Spectra7. “AR’s low latency, light weight and high speed requirements can be addressed uniquely and immediately with Spectra7’s technology and we are excited about the potential in this highly anticipated market.”

The Company’s AR-Connect™ product line includes of a family of active, ultra-thin AR interconnects designed for a broad range of popular industry standard and proprietary HMD and host connector interfaces and cable lengths. Selected product configurations are sampling now to leading OEMs as part of the Company’s AR-Connect™ Partner Program.

ABOUT SPECTRA7 MICROSYSTEMS INC.

Spectra7 Microsystems Inc. is a high performance analog semiconductor company delivering unprecedented speed, resolution and signal fidelity that enables ultra-light, high-speed, micro-thin interconnects which enable new classes of industrial design for market-leading consumer electronic products including Virtual Reality, Wearable Computing Ultra-HD 4K/8K Displays and Tablets. Spectra7 is headquartered in Markham, Ontario with development centers in Silicon Valley, California and Cork, Ireland.