Strengthened Balance Sheet with C$12.5 Million in New Capital in the Second
Quarter, C$11.7 Million in Debt
Eliminated
Advancing Key Data Center Testing
Activity
SAN
JOSE, Calif., Aug. 29,
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 and
six months ended June 30, 2024. A
copy of the unaudited interim consolidated financial statements for
the three and six months ended June 30,
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.
Second quarter 2024 financial highlights
- Second quarter 2024 revenue was $0.9
million, increased from $0.8
million in the first quarter 2024 and decreased from
$3.3 million in the second quarter
2023.
- Gross margin1 was 64%, compared to 41% in the
preceding quarter and 63% in the prior year second quarter.
- Non-IFRS operating expenses2 were $2.5 million, increased from $2.1 million in the first quarter 2024 and
$2.4 million in the second quarter
2023.
- Basic and diluted loss per share for the second quarter 2024
was $(0.17), compared with a basic
and diluted loss per share of $(0.06)
in the first quarter 2024 and $(0.03)
in the second quarter 2023.
- EBITDA3 loss for the second quarter was $1.7 million, compared with an EBITDA loss of
$1.4 million for the first quarter
2024 and an EBITDA loss of $148,000
in the second quarter 2023.
The Company completed a private placement of units for gross
proceeds of approximately C$12.5
million. Additionally, the Company eliminated C$11.7 million in long-term debt by converting
its outstanding debentures into equity securities on May 15, 2024.
"Spectra7 remains focused on advancing to commercial
orders from top global datacenter customers for its new 100Gbps
active copper cable products4. The Company is actively
engaged in testing with data center and other customers, supported
by our newly strengthened balance sheet," said Ron Pasek, Interim 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 financial
statements.
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
(In
thousands)
|
|
(In
thousands)
|
|
2024
|
|
2023
|
|
Change
|
|
|
2024
|
|
2023
|
|
Change
|
|
|
$
|
|
$
|
|
$
|
%
|
|
$
|
|
$
|
|
$
|
%
|
|
Revenue
|
862
|
|
3,266
|
|
(2,404)
|
(74 %)
|
|
1,678
|
|
6,401
|
|
(4,723)
|
(74 %)
|
|
Cost of
sales
|
314
|
|
1,211
|
|
(897)
|
(74 %)
|
|
797
|
|
2,383
|
|
(1,585)
|
(67 %)
|
|
Gross profit
|
548
|
|
2,056
|
|
(1,507)
|
(73 %)
|
|
881
|
|
4,018
|
|
(3,137)
|
(78 %)
|
|
Gross margin
%
|
64 %
|
|
63 %
|
|
1 %
|
|
|
53 %
|
|
63 %
|
|
(10 %)
|
|
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 financial statements.
|
|
in
thousands
|
|
|
2022
|
|
2023
|
|
2024
|
|
|
Sep
30
|
Dec
31
|
|
Mar
31
|
Jun
30
|
Sep
30
|
Dec
31
|
|
Mar
31
|
Jun
30
|
|
|
$
|
$
|
|
$
|
$
|
$
|
$
|
|
$
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses -
IFRS
|
|
2,936
|
3,210
|
|
3,053
|
3,330
|
3,086
|
4,479
|
|
2,575
|
9,866
|
|
Share‑based
compensation
|
|
567
|
469
|
|
541
|
486
|
288
|
334
|
|
182
|
270
|
|
Interest on lease
obligation of right-of-use assets
|
|
4
|
3
|
|
1
|
4
|
4
|
3
|
|
1
|
3
|
|
Accretion
expense
|
|
463
|
425
|
|
370
|
389
|
411
|
493
|
|
538
|
142
|
|
Other income
|
|
-
|
-
|
|
-
|
(12)
|
(30)
|
(9)
|
|
-
|
10
|
|
Foreign exchange
gain
|
|
(9)
|
354
|
|
(72)
|
57
|
(110)
|
143
|
|
(211)
|
27
|
|
Extingushment of
convertible debt
|
|
-
|
-
|
|
-
|
-
|
-
|
-
|
|
-
|
6,922
|
|
Termination
cost
|
|
|
-
|
|
|
|
|
-
|
|
-
|
-
|
|
Non-IFRS operating
expenses
|
|
1,911
|
1,959
|
|
2,212
|
2,407
|
2,523
|
3,515
|
|
2,065
|
2,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in
thousands
|
|
|
2022
|
|
2023
|
|
2024
|
|
|
Sep
30
|
Dec
31
|
|
Mar
31
|
Jun
30
|
Sep
30
|
Dec
31
|
|
Mar
31
|
Jun
30
|
|
|
$
|
$
|
|
$
|
$
|
$
|
$
|
|
$
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development, net of investment
tax credits and including amortization of licenses
|
|
985
|
928
|
|
995
|
1,195
|
1,409
|
1,154
|
|
1,040
|
1,123
|
|
Sales and
marketing
|
|
224
|
280
|
|
269
|
252
|
271
|
325
|
|
279
|
270
|
|
General and
administrative
|
|
635
|
684
|
|
881
|
891
|
762
|
1,947
|
|
657
|
1,014
|
|
Depreciation of
right-of-use assets
|
|
60
|
60
|
|
60
|
60
|
60
|
60
|
|
60
|
57
|
|
Depreciation of
property and equipment
|
|
7
|
8
|
|
8
|
8
|
21
|
28
|
|
28
|
28
|
|
Non-IFRS operating
expenses
|
|
1,911
|
1,959
|
|
2,212
|
2,407
|
2,523
|
3,515
|
|
2,065
|
2,491
|
3 EBITDA or earnings before interest, tax,
depreciation, and amortization is a non-GAAP measure. EBITDA
excludes share-based compensation, amortization, depreciation,
interest, and tax expenses. Refer to "Non-GAAP Measures" in the
MD&A and the table below for reconciliation to measures
reported in the Company's annual financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in
thousands
|
|
|
2022
|
|
2023
|
|
2024
|
|
|
Sep
30
|
Dec
31
|
|
Mar
31
|
Jun
30
|
Sep
30
|
Dec
31
|
|
Mar
31
|
Jun
30
|
|
|
$
|
$
|
|
$
|
$
|
$
|
$
|
|
$
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(1,461)
|
(1,231)
|
|
(1,090)
|
(1,275)
|
(1,500)
|
(4,315)
|
|
(2,242)
|
(9,318)
|
|
Depreciation of
right-of-use assets
|
|
60
|
60
|
|
60
|
60
|
60
|
60
|
|
60
|
57
|
|
Depreciation of
property and equipment
|
|
7
|
8
|
|
8
|
8
|
21
|
28
|
|
28
|
28
|
|
Depreciation expense -
COGS
|
|
31
|
35
|
|
35
|
30
|
31
|
31
|
|
32
|
32
|
|
Amortization -
intangible assets
|
|
137
|
55
|
|
76
|
105
|
90
|
179
|
|
167
|
167
|
|
Share-based
compensation
|
|
567
|
469
|
|
541
|
486
|
288
|
334
|
|
182
|
270
|
|
Interest on lease
obligation of right-of-use assets
|
|
4
|
3
|
|
1
|
4
|
4
|
3
|
|
1
|
3
|
|
Accretion
expense
|
|
463
|
425
|
|
370
|
389
|
411
|
493
|
|
538
|
142
|
|
Other income
|
|
-
|
-
|
|
-
|
(12)
|
(30)
|
(9)
|
|
-
|
10
|
|
Foreign Tax
|
|
-
|
(216)
|
|
-
|
-
|
-
|
(119)
|
|
-
|
-
|
|
Foreign exchange
gain
|
|
(9)
|
354
|
|
(72)
|
57
|
(110)
|
143
|
|
(211)
|
27
|
|
Extingushment of
convertible debt
|
|
-
|
-
|
|
-
|
-
|
-
|
-
|
|
-
|
6,922
|
|
Other income
|
|
-
|
-
|
|
-
|
-
|
-
|
-
|
|
-
|
-
|
|
EBITDA
|
|
(201)
|
(38)
|
|
(70)
|
(148)
|
(734)
|
(3,172)
|
|
(1,445)
|
(1,659)
|
4 This is forward-looking information and is based on
a number of assumptions. See "Cautionary Notes" below.
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 a technical support location
in Dongguan, China. For more
information, please 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.
CAUTIONARY NOTES
Certain statements contained in this press release constitute
"forward-looking statements". All statements other than statements
of historical fact contained in this press release, including,
without limitation, the Company's expectation that it will advance
to commercial orders from top global datacenter customers for its
new 100Gbps active copper cable products, and the Company's
strategy, plans, objectives, goals and targets, and any statements
preceded by, followed by or that include the words "believe",
"expect", "aim", "intend", "plan", "continue", "will", "may",
"would", "anticipate", "estimate", "forecast", "predict",
"project", "seek", "should" or similar expressions or the negative
thereof, are forward-looking statements. These statements are not
historical facts but instead 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 forecasted in such forward-looking
statements. Additional factors that could cause actual results,
performance or achievements to differ materially include, but are
not limited to, the risk factors discussed in the Company's
management's discussion and analysis for the year ended
December 31, 2023.. Management
provides forward-looking statements because it believes they
provide useful information to investors when considering their
investment objectives and cautions investors not to place undue
reliance on forward-looking information. Consequently, all of the
forward-looking statements made in this press release are qualified
by these cautionary statements and other cautionary statements or
factors contained herein, and there can be no assurance that the
actual results or developments will be realized or, even if
substantially realized, that they will have the expected
consequences to, or effects on, the Company. These forward-looking
statements are made as of the date of this press release and the
Company assumes no obligation to update or revise them to reflect
subsequent information, events or circumstances or otherwise,
except as required by law.
For more information, please contact:
Matt Kreps, Managing Director
Darrow Associates Investor Relations
mkreps@darrowir.com
214-597-8200
Spectra7 Microsystems Inc.
Dave Mier
Interim Chief Financial Officer
925-858-7011
ir@spectra7.com
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SOURCE Spectra7 Microsystems Inc.