ViXS Systems Inc. completes private placement and enters amalgamation agreement as part of going public process

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TORONTO, May 22, 2013 /CNW/ - ViXS Systems Inc. ("ViXS") is pleased to announce the closing of a $57,357,997 private placement and the signing of an amalgamation agreement with W 7 Acquisition Corp. ("W7") as part of the previously announced going public transaction.  W7 is a capital pool company and its principal business is the identification and evaluation of assets or businesses with a view to completing a "Qualifying Transaction" under the policies of the TSX Venture Exchange.

On May 22, 2013, ViXS and ViXS Subco Inc. ("ViXS Subco"), a subsidiary of ViXS, entered into an amalgamation agreement (the "Amalgamation Agreement") with W7 to amalgamate under the Canada Business Corporations Act (the "Amalgamation").  Under the terms of the agreement, among other things, holders of common shares of W7 will exchange, for every 38.8889 W7 common shares, one common share in the capital of ViXS.

In connection with the Amalgamation, on May 22, 2013, ViXS (through ViXS Subco) completed a private placement (the "Offering") of 16,387,999 subscription receipts of ViXS Subco ("Subscription Receipts") at an offering price of $3.50 per Subscription Receipt for gross proceeds of $57,357,997.  The Offering was conducted through a syndicate of agents co-led by GMP Securities L.P. and Stifel Nicolaus Canada Inc. and including BMO Capital Markets, Cormark Securities Inc. and Byron Capital Markets Ltd. (the "Agents").  Upon the satisfaction of certain release and notice conditions, each Subscription Receipt will be automatically exchanged immediately prior to the completion of the Amalgamation for one common share of ViXS Subco, which will then be exchanged for one common share of ViXS in accordance with the terms of the Amalgamation Agreement.

"We are pleased to have raised over $57 million in these challenging market conditions as it is a strong endorsement of our innovative technology, solid business plan, and talented employees," said Sally J. Daub, President and Chief Executive Officer, ViXS.  "We look forward to completing our reverse take-over with W7 and achieving public company status for our shareholders and investors."

The proceeds from the private placement will be held in escrow pending completion of the Amalgamation. The net proceeds will be used to repay in full the US$5.5 million aggregate principal amounts outstanding under ViXS' loan agreement with Comerica Bank and loan arrangements with two of ViXS' shareholders, and for working capital purposes.  While ViXS currently anticipates that it will use the net proceeds of the private placement as described above, it may re-allocate the net proceeds from time to time depending upon changes in business conditions prevalent at the time.

For their services in connection with the private placement, the Agents will receive a commission equal to 6% of the gross proceeds of the Offering.

It is expected that current shareholders of ViXS, holders of Subscription Receipts who will ultimately receive common shares of ViXS upon the Amalgamation becoming effective, and former shareholders of W7 will own approximately 67%, 33% and less than 1%, respectively, of the issued and outstanding common shares of ViXS post-Amalgamation.

Completion of the Amalgamation is subject to a number of conditions including, among other things, receipt of conditional approval for the listing of the common shares of ViXS on the Toronto Stock Exchange, TSX Venture Exchange acceptance, and shareholders of W7 approving the Amalgamation.  There can be no assurance that the Amalgamation will be completed as proposed or at all.

Copies of the Amalgamation Agreement and a comprehensive press release describing the Amalgamation are available electronically on the SEDAR website at www.sedar.com under W7's profile.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

ANY SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE "1933 ACT") AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO A U.S. PERSON IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.

Notice on forward-looking statements

This release includes forward-looking statements regarding ViXS and its businesses. Such statements are based on the current expectations and views of future events of the management of each entity, and are based on assumptions and subject to risks and uncertainties.  Although the management of each entity believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect. The forward-looking events and circumstances discussed in this release, including completion of the Amalgamation and achieving public company status, may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting the companies, including failure to satisfy conditions of closing contemplated by the Amalgamation Agreement, risks regarding the semiconductor industry, market conditions, economic factors, ViXS' management's ability to manage and to operate the business, and the equity markets generally. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and ViXS undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

About ViXS Systems Inc.

ViXS is the semiconductor pioneer in designing and developing high-performance media solutions for the consumer electronics and video service provider industries.  With 400 patents issued and pending worldwide, ViXS has been recognized with a number of industry awards for innovation. ViXS is the world leader in transcoder deployments with over 30 million shipments to date, and still growing.

ViXS has a comprehensive portfolio of products to meet the diverse needs of the global media industry.  Portfolio highlights include the most advanced dense transcoder available for cloud-based solutions, as well as SoC's for home devices capable of doing the most simultaneous number of HD streams in the industry.  Moreover, ViXS is the only company to have integrated transcoding and Multimedia over Coax Alliance (MoCA) technologies to create the lowest-cost media gateway capable of delivering premium content to consumer IP devices, such as the iPad, inside and outside of the home.

ViXS has three primary product lines: XCode, XCodePro and XConnex.  The XCode family of media processors range from stand-alone transcoding chips to full SoC solutions, each capable of handling from one to four simultaneous HD-to-HD transcodes.  XCodePro products address the professional enterprise market and are being deployed today for cloud-based media streaming services.  The XConnex product line is for communications devices, including MoCA 1.1 and 2.0 solutions.  Additionally, ViXS customers are provided with a robust software development kit known as Xtensiv. 

ViXS is headquartered in Toronto, Canada with global operations and offices in Europe, Asia and North America.  For more information on ViXS, visit our website: www.vixs.com.

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.

SOURCE: ViXS Systems Inc.

Donna Wong, Tel: [phone] ext. 246, E-mail: [email protected]