Spectra7 Microsystems Inc. — Capital/Financing Update 2023

Mar 20, 2023

FORM 51-102F3

MATERIAL CHANGE REPORT

Item 1	Name and Address of CompanySpectra7 Microsystems Inc. (the “Company”)181 Bay Street, Suite 1800Toronto, OntarioM5J 2T9
Item 2Item 3Item 4	Date of Material ChangeMarch 15, 2023News ReleaseA press release disclosing the material chanthrough NewsWire.Summary of Material Change

A press release disclosing the material change was disseminated on March 15, 2023 through NewsWire.

On March 15, 2023, the Company announced that it had closed a private placement to certain institutional investors and insiders of the Company (the “ Private Placement ”) of 5,990,000 units (“ Units ”), with each Unit consisting of one common share (each a “ Common Share ”) and one common share purchase warrant (each a “ Warrant ”) at a purchase price of $1.00 per Unit for aggregate gross proceeds of $5.99 million.

Each Warrant is exercisable into one Common Share at an exercise price of $1.18 until March 15, 2028, subject to adjustment upon certain customary events. The expiry date of the Warrants can be accelerated by the Company at any time prior to the expiry date of the Warrants if, at any time following March 15, 2023, the closing price of the Common Shares on the TSX Venture Exchange (“ TSXV ”) is greater than $4.00 for any ten (10) non-consecutive trading days.

A.G.P./Alliance Global Partners (the “ Agent ”) acted as the exclusive placement agent for the Private Placement in the United States. The Agent received a cash commission of approximately $401,000 and compensation warrants entitling the Agent to purchase up to 229,504 Common Shares at $1.10 per Common Share for the period commencing on the date that is six months after the closing date until the fifth anniversary of the closing date (the “ Exercise Period ”). The expiry date of the warrant can be accelerated by the Company if, at any time during the Exercise Period, the closing price of the Common Shares on the TSXV is greater than $4.00 for any ten (10) non-consecutive trading days.

Pursuant to Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“ MI 61-101 ”), the Private Placement constituted a “related party transaction” as insiders of the Company subscribed for 404,800 Units. The Company is relying on exemptions from the formal valuation and minority approval requirements contained in section 5.5(a) and 5.7(a) of MI 61-101, as neither the fair market value of the Units, nor the consideration paid, exceeded 25% of the Company’s market capitalization.

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Item 5 Full Description of Material Change

See above and the press release dated March 15, 2023, attached hereto as Schedule “A”.

Item 6 Reliance on subsection 7.1(2) of National Instrument 51-102

Confidentiality is not requested.

Item 7 Omitted Information

No information has been omitted in respect of the material change.

Item 8 Executive Officer

The following executive officer of the Company is knowledgeable about the material change disclosed in this report.

Bonnie Tomei, Chief Financial Officer, Telephone: 408-770-2915

Item 9 Date of Report

March 20, 2023

Schedule “A”

See attached.

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