Spectra7 Announces Second Quarter 2022 Financial Results

Record revenue for the first half of $5.6 millionup more than 330% compared to the same period a year ago

CEO Raouf Halim returns to certain strategic functions and to the board of directors

SAN JOSE, CA., August 29, 2022 /CNW/ — (TSXV: SEV) (OTCQB: SPVNF) Spectra7 Microsystems Inc. (“Spectre7“or the”Company“), a leading provider of high-performance analog semiconductors for broadband connectivity markets, today announced its financial results for the second quarter of 2022. A copy of the unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2022prepared in accordance with International Financial Reporting Standards and the corresponding Management’s Discussion and Analysis (the “MD&A”) will be available under the Company’s profile on www.sedar.com. Unless otherwise indicated, all dollar amounts in this press release are expressed in US dollars.

(PRNewsfoto/Spectra7 Microsystems Inc.)

“We have reached the high end of our updated guidance range with revenue of $5.6 millionkeeping us on pace to generate record revenue this year,” said Ron Pasek, President of the council. “We have also strengthened our balance sheet with an offering of convertible debentures increased by 8.9 million Canadian dollars. The terms of the new debentures allow us to borrow up to C$5.0 million from third-party lenders to meet working capital needs as part of our growth strategy. I remain excited about the long-term opportunities in our business to address the growing need for high-speed connectivity solutions in the large-scale data center and AR/VR markets. »1

Q2 2022 Financial Highlights

  • Second quarter sales were approximately $3.5 millionfrom $0.7 million in the same quarter a year ago, an increase of approximately 380%. Second quarter revenue includes approximately $0.9 million first quarter product shipments that were carried over to the second quarter.

  • Revenue for the first half of 2022 is $5.6 milliona Company record, up more than 330% compared to the first half of 2021.

  • Gross margin2 as a percentage of revenue for the second quarter was 43%, compared to 59% in the second quarter of 2021, a decline primarily due to the continued rise in the costs of securing wafers and the supply chain capacity required to meet growing customer demand for our products.

  • Non-IFRS operating expenses3 in the second quarter were $2.4 millionfrom $1.8 million at the same time a year ago. Operating expenses for the second quarter of 2021 were reduced due to employee furloughs in response to the impact of Covid-19 at that time. In addition, the second quarter of 2022 included costs to support the Company’s plant production ramp DreamWeVR™ products.

  • The basic and diluted loss per share for the second quarter was $(0.05)compared to a basic and diluted loss per share of $(0.08) at the same time a year ago.

  • EBITDA4 the loss in the second quarter was ($0.6) millionagainst an EBITDA loss of around ($1.2) million at the same time a year ago.

Outlook 2H 2022 1

The Company expects to generate record revenue in 2022. The current revenue outlook for the second half of 2022 is in the range of $4.6 million at $6.0 million.5 While the demand environment remains strong, ongoing supply constraints are impacting the current revenue outlook. In the middle of this range, the projected annual results represent an annual turnover of more than $11.0 milliondouble the revenue generated in 2021.

Non-IFRS operating expenses3 should be between $4.5 million and $5.0 million5, which includes increased headcount growth to support customers and development expenditures associated with new products. Non-IFRS operating expenses were approximately $3.9 million in the second half of 2021.

Main company highlights

  • Increased production with a leading global game manufacturing company using Spectra7’s DreamWeVR™ chipsets in its next-generation head-mounted display interconnect.

  • Extended availability of active copper cables with ACES to provide 200 and 400 Gbps interconnects for data center markets

  • Added two new hyperscale data center designs, for a total of 105 so far.

CEO Update

CEO Raouf Halim continues to be on sick leave although Mr. Halim has returned to his board duties for a limited period. Spectra7 is pursuing its business plans uninterrupted, led by its strong leadership team. Chairman of the Board of Directors Ronald PasekFinancial director Bonnie Tomeiand other members of the management team will continue to co-manage Mr. Halim’s duties during his leave.

RSU Grants

As part of the annual long-term incentive plan described in their respective letters of offer, the Board of Directors of Spectra7 granted 1,187,828 Restricted Share Units (“RSUs”) to the Chief Executive Officer of the Company and the number of PSUs to the Chief Financial Officer of the Corporation according to is equal to approximately CAD $219,000 divided by the closing price of the common shares on the TSX Venture Exchange on August 29, 2022.


1 This is forward-looking information based on a number of assumptions, including current customer purchase orders received, supply prospects and expected operating expenses. See “Cautionary Notes”.
2 Gross margin is a non-GAAP measure. See “Revenues and Gross Margin” in the MD&A for a reconciliation to the measures presented in the Company’s financial statements.
3 Non-IFRS operating expenses is a non-GAAP measure that includes research and development, sales and marketing, general and administrative expenses, and depreciation of capital equipment and right-of-use assets. and excludes stock-based compensation expense, one-time termination costs, interest and related financing costs, change in fair value of warrant liabilities, gain/loss of exchange rate and gain/loss on disposal of property, plant and equipment. Refer to the “Non-IFRS Operating Expenses” section in the MD&A for a reconciliation to the measures presented in the Company’s financial statements.
4 EBITDA or earnings before interest, taxes, depreciation and amortization is a non-GAAP measure. EBITDA excludes stock-based compensation, amortization, depreciation, interest and tax charges. Refer to “EBITDA” in the MD&A for a reconciliation to the measures presented in the Company’s financial statements.
5 This is forward-looking information based on a number of assumptions, including current customer purchase orders received, supply prospects and expected operating expenses. See “Cautionary Notes”.


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 data centers, 5G infrastructure, virtual and augmented reality and other connectivity markets. Spectra7 is based on San Jose, California with a design center in Cork, Ireland and location of technical support at Dongguan, China.

For more information, visit www.spectra7.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.


Certain statements contained in this press release constitute “forward-looking statements”. All statements other than statements of historical facts contained in this press release, including, without limitation, the Company’s expectations for revenue and supply availability in the second half of 2022, the the Company’s ability to obtain additional financing as permitted by the New Debentures, anticipated operating expenditures, and the Company’s strategy, plans, objectives, goals and targets, and any statements preceded, followed or containing the words “believe”, “expect”, “aim”, “intend”, “plan”, “continue”, “will”, “may”, “would”, “anticipate”, “estimate”, “expect”, “predict”, “project”, “seek”, “should” or similar expressions or their negative form, are forward-looking statements. These statements are not historical facts but rather represent only the Company’s expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed, implied or anticipated in such forward-looking statements. Other factors that could cause actual results, performance or achievements to differ materially include, but are not limited to, the risk factors set forth in the Company’s Annual Information Form for the year ended December 31, 2021. Management provides forward-looking statements because it believes they provide useful information to investors in considering their investment objectives and cautions investors not to place undue reliance on forward-looking information. Accordingly, any forward-looking statements made in this press release are qualified by such cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that actual results or developments will be achieved or, even they are substantially achieved, that they will have the expected consequences or effects on the Company. These forward-looking statements are made as of the date of this press release, and the Company undertakes no obligation to update or revise them to reflect subsequent or other information, events or circumstances, except as required by law.

For more information please contact:

Matt Kreps/Jim Fanucchi
Darrow Associates
[email protected]

Spectra7 Microsystems Inc.
Bonnie Tomei
Financial director
[email protected]

Spectra7 Microsystems Inc.
John Mitchell
Public relations
[email protected]



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