ViXS Closes C$6.9 Million of Private Placement Financings

TORONTO, ON --(Marketwired - January 13, 2016) -

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ViXS Systems Inc. ("ViXS" or the "Company") ( TSX : VXS ), a pioneer and leader in media processing solutions, today announced, that it has completed its two previously announced non-brokered private placements (collectively the "Private Placements") raising aggregate gross proceeds of approximately C$6,903,280. Participants in the Private Placements were primarily existing shareholders and senior management of the Company and the net proceeds will be used to strengthen the Company's financial position and fund working capital needs. The Private Placements were completed on the terms and conditions outlined in the Company's press release dated January 6, 2016.

"We are pleased to be able to strengthen our balance sheet with this additional capital and grateful to the support shown by our shareholders," said Sohail Khan, ViXS' President and CEO. "As evidenced by the feedback we received from customers and partners at last week's Consumer Electronics Show, we believe ViXS has the technology and products for our targeted markets to reinvigorate revenue growth. The funds from this completed financing should significantly help enable these efforts."

The Private Placements consisted of a private placement (the "Convertible Debenture Private Placement") of secured subordinated convertible debentures (the "Convertible Debentures") and a private placement (the "Unit Private Placement") of units (the "Units"). All securities sold in the Private Placements, including any shares issued on the conversion of the Convertible Debentures and the exercise of common share purchase warrants issued under the Private Placements, are subject to applicable four month hold periods pursuant to Canadian securities laws and such other hold periods in other jurisdictions applicable to the purchaser.

The Private Placements included the issuance of common share purchase warrants (as described below) which could, assuming the exercise of all of the common share purchase warrants issued pursuant to the Private Placements, generate additional aggregate gross proceeds of C$2.8 Million. 

No new insiders of the Company were created on the closing of the Private Placements.

Convertible Debenture Private Placement

Under the Convertible Debenture Private Placement the Company issued C$3,424,266 principal amount of secured subordinated convertible debentures (the "Convertible Debentures"). In connection with the Convertible Debenture Private Placement the Company issued 2,517,842 common share purchase warrants (the "Convertible Debenture Warrants"). The Convertible Debenture Warrants are exercisable for a period of 12 months from the issue date at an exercise price of C$0.60 per common share. The Convertible Debentures and the Convertible Debenture Warrants were issued on the terms and conditions outlined in the Company's press release dated January 6, 2016.

Unit Private Placement

Under the Unit Private Placement the Company issued 10,075,336 units (the "Units") at a price of C$0.3453 per Unit for gross proceeds of C$3,479,014. Each Unit consisted of one common share of the Company and one-quarter of one common share purchase warrant (each whole warrant a "Unit Warrant"). Each Unit Warrant will enable the holder to acquire one additional common share of the Company at an exercise price of C$0.50 per common share for a period of 12 months from the issue date.

Certain insiders of the Company subscribed for Units in the Unit Private Placement (the "Participating Insiders"). The Participating Insiders acquired an aggregate of 659,603 Units under the Unit Private Placement. The full details of the subscriptions of the Participating Insiders is detailed in the Company's press release dated January 6, 2016. Following the completion of the Unit Private Placement the Participating Insiders now have registered or beneficially own 2,410,118 common shares (representing 4% of the issued and outstanding common shares) and warrants to acquire a further 164,900 common shares of the Company. Assuming the exercise of all the warrants held by the Participating Insiders only and no other exercises, the Participating Insiders would own up to approximately 4.2% of the number of common shares of the Company on a partially diluted basis.

The subscriptions by the Participating Insiders under the Unit Private Placement are "related party transactions" for the purposes of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Unit Private Placement was completed in reliance on available exemptions from the formal valuation and minority approval requirements of MI 61-101. Insofar as it applies to interested parties (as that term is defined in MI 61-101) neither the fair market value of the Units issued nor the consideration paid for the Units pursuant to the Unit Private Placement exceeded 25% of the Company's market capitalization. The Company filed a material change report less than 21 days in advance of the closing of the Private Placements.

The Company did not pay any commissions or fees in connection with either of the Private Placements.

About ViXS Systems Inc.

ViXS is a pioneer and market leader in designing revolutionary media processing semiconductor solutions for video over IP streaming solutions, with over 510 patents issued and pending worldwide, numerous industry awards for innovation, and over 33 million media processor shipped to date. ViXS is driving the transition to Ultra HD 4K across the entire content value chain by providing professional and consumer grade chipsets that support the new High Efficiency Video Coding (HEVC) standard up to Main 12 Profile, reducing bandwidth consumption by 50% while providing the depth of color and image clarity needed to take advantage of higher-resolution content. ViXS' XCodePro 300 family is ideal for Ultra HD 4K infrastructure equipment, and the XCode 6000 family of system-on-chip (SoC) products achieve unprecedented levels of integration that enable manufacturers to create cost-effective consumer entertainment devices.

ViXS is headquartered in Toronto, Canada with offices in Europe, Asia and North America. VIXS ^™ , the ViXS ^® logo, XCode ^® , XCodePro™, XConnex™ and Xtensiv™ are trademarks and/or registered trademarks of ViXS. Other trademarks are the property of their respective owners. For more information on ViXS, visit our website:  www.vixs.com .

Forward-Looking Statements

Statements in this press release that are not historical facts constitute "forward-looking statements" and information within the meaning of applicable securities laws. Such statements include, but are not limited to, statements regarding the anticipated use of proceeds of the Private Placements and the receipt of proceeds on the conversion of the Convertible Debentures or the exercise of the Convertible Debenture Warrants or the Unit Warrants. The intended use of the proceeds of each of the Private Placements by ViXS might change if the board of directors of ViXS determines that it would be in the best interests of ViXS to deploy the proceeds for some other purpose. The words "will", "expect", "may" and similar expressions are intended to be among the statements that identify forward-looking statements. The forward-looking statements are founded on the basis of expectations and assumptions made by ViXS.

Readers are cautioned that assumptions used in the preparation of such information may prove to be incorrect and not to place undue reliance upon any such forward-looking statements or information. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of ViXS.

ViXS does not undertake any obligation to update or revise any forward-looking statements or information except as expressly required by applicable securities laws.

None of the information contained on, or connected to, ViXS's website is incorporated by reference herein.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities. The securities to be issued under the Private Placements have not been registered under the United States Securities Act of 1933, as amended (the "Act") or under any state securities laws, and may not be offered or sold in the United States to a U.S. Person (as such term is defined in the Act) unless registered under the Act and applicable state securities laws, or unless an exemption from registration is available.