ViXS Announces Closing of Second Tranche of the Private

TORONTO, ON --(Marketwired - October 31, 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 closed the second tranche of its previously announced non-brokered unit private placement offering. This final tranche of equity was issued to insiders and additional outside investors raising aggregate gross proceeds of approximately C$535,000 and total equity raised C$3,475,000. The net proceeds will be used for general corporate and working capital purposes in order to support the growth of the business.

Second Unit Private Placement The second tranche of the unit private placement was an offering consisting of common shares and warrants (the " Second Unit Private Placement "). Under the Second Unit Private Placement, the Company issued a total of 1,783,333 units (" Units ") at a price of C$0.30 per Unit for gross proceeds of C$535,000 with each Unit consisting of one Common Share and 0.25 Common Share purchase warrants (" Unit Warrants ").

Under both the first tranche private placement, which closed September 9, 2016, and the Second Unit Private Placement, the Company has issued a total of 11,583,333 Units at a price of C$0.30 per Unit for gross proceeds of C$3,475,000 with each Unit consisting of one Common Share and 0.25 Common Share purchase warrants. Each whole Unit Warrant is exercisable into one Common Share at an exercise price of C$0.50 per Common Share. The exercise of all of the Unit Warrants issued in connection with the Second Unit Private Placement would result in the issuance of an additional 445,833 Common Shares and aggregate gross proceeds to the Company of C$222,917.

Certain insiders of the Company subscribed for Units in the Second Unit Private Placement (the " Participating Insiders "). The Participating Insiders acquired an aggregate of 1,033,333 Units under the Second Unit Private Placement.

Following the completion of the Second Unit Private Placement, the Participating Insiders are the registered or beneficial owners of 2,895,657 common shares (representing 4.6% of the issued and outstanding common shares) and warrants to acquire a further 390,734 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 5.0% of the number of common shares of the Company on a partially diluted basis.

(1) Assumes that the participant in the Second Unit Private Placement exercises their respective Unit Warrants.

(2) Assumes that the participant in the Second Unit Private Placement does not exercise their respective Unit Warrant.

As a result, subscriptions by the Participating Insiders under the private placements are "related party transactions" for the purposes of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (" MI 61-101 "). The Second Unit Private Placement has and will be completed in reliance on available exemptions from the formal valuation and minority approval requirements of MI 61-101 provided in paragraph (a) of Section 5.5 and paragraph (a) of Section 5.7, respectively, 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 will exceed 25% of the Company's market capitalization.

The Second Unit Private Placement is exempt from prospectus and registration requirements of applicable securities laws and the Units and underlying securities are subject to a mandatory four-month hold period.

This release does not constitute an offer for sale of securities nor a solicitation for offers to buy any securities. The securities referred to in this press release have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities law and may not be offered or sold to, or for the account or benefit of, persons in the United States or "U.S. persons", as such term is defined in Regulation S promulgated under the U.S. Securities Act, unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

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 482 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

Certain statements in this press release which are not historical facts constitute forward-looking statements or information within the meaning of applicable securities laws ("forward-looking statements"). Such statements include, but are not limited to, statements regarding ViXS' projected revenues, gross margins, earnings, growth rates, the impact of new product design wins, market penetration and product plans. The use of terms such as "may", "anticipated", "expected", "projected", "targeting", "estimate", "intend" and similar terms are intended to assist in identification of these forward-looking statements. Readers are cautioned not to place undue reliance upon any such forward-looking statements. Such forward-looking statements are not promises or guarantees of future performance and involve both known and unknown risks and uncertainties that may cause ViXS' actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements. Accordingly, there can be no assurance that forward-looking statements will prove to be accurate and readers are therefore cautioned not to place undue reliance upon any such forward-looking statements.

Factors that could cause results or events to differ materially from current expectations expressed or implied by forward looking statements contained herein include, but are not limited to: our history of losses and the risks associated with not achieving or sustaining profitability; the Company's dependence on a limited number of customers for a substantial portion of revenues; fluctuating revenue and expense levels arising from changes in customer demand, sales cycles, product mix, average selling prices, manufacturing costs and timing of product introductions; risks associated with competing against larger and more established companies; competitive risks and pressures from further consolidation amongst competitors, customers, and suppliers; market share risks and timing of revenue recognition associated with product transitions; risks associated with changing industry standards such as HEVC (High Efficiency Video Codec), HDR (High Dynamic Range) and Ultra HD resolution; risks related to intellectual property, including third party licensing or patent infringement claims; the loss of any of the Company's key personnel could seriously harm its business; risks associated with adverse economic conditions; delays in the launch of customer products; price re-negotiations by existing customers; the Company's dependence on a limited number of supply chain partners for the manufacture of its products, legal proceedings arising from the ordinary course of business; ability to raise needed capital; ongoing liquidity requirements;and other factors discussed in the "Risk Factors" section of the Company's Annual Information Form dated March 31, 2016, a copy of which is available under the Company's profile on SEDAR at www.sedar.com . All forward-looking statements are qualified in their entirety by this cautionary statement. ViXS is providing this information as of the current date and does not undertake any obligation to update any forward-looking statements contained herein as a result of new information, future events or otherwise except as may be required by applicable securities laws.