KWESST Micro Systems Inc. Announces Pricing of United States Public Offering

Rhea-AI Summary

KWESST Micro Systems Inc. announces the pricing of its underwritten public offering of 1,538,500 common shares at $0.65 per share, generating gross proceeds of approximately $1,000,000. The offering is expected to close soon.

Insights

Financial Analyst

The pricing of KWESST Micro Systems Inc.'s public offering at $0.65 per share with an aim to raise approximately $1,000,000 is indicative of the company's strategy to generate capital for its operations and potential expansion. It is essential to consider the offering price relative to the current market value of the shares. If the offering price is significantly lower than the recent trading price, it could indicate a dilutive effect on current shareholders, potentially leading to a decrease in the stock's value.

Investors should assess the use of proceeds outlined by the company, as it could signal future growth prospects or an immediate need to finance existing operations. The market's reception of this offering will be telling; a successful raise could boost investor confidence, while a lackluster response might raise concerns about the company's valuation and prospects.

Market Research Analyst

From a market perspective, the decision by KWESST to offer common shares or Pre-funded Warrants provides flexibility to investors, potentially widening the pool of interested parties. However, the impact on the company's stock will depend on the perception of the company's growth trajectory and the anticipated return on investment. This offering could attract investors looking for entry points into the defense technology sector, which KWESST operates within, assuming they believe in the long-term viability and innovation potential of the company's product offerings.

Additionally, the timing of the offering in relation to market conditions and sector performance is critical. If the defense sector is experiencing a bullish phase due to geopolitical tensions or increased defense spending, the offering may be well-received. Conversely, a bearish market could lead to a different outcome.

Securities Lawyer

From a legal and regulatory standpoint, the offering of both common shares and Pre-funded Warrants by KWESST requires adherence to strict disclosure and registration requirements as mandated by the SEC. The underwriting discounts and commissions, along with the offering expenses, will reduce the net proceeds to the company, which is a standard practice but should be scrutinized for fairness and market conformity.

Investors should also be aware of the rights and potential dilution associated with Pre-funded Warrants, as they differ from common shares. The terms of these securities will be outlined in the offering documents and understanding these terms is important for evaluating the attractiveness of the investment and the potential impact on shareholder equity.

Ottawa, Ontario--(Newsfile Corp. - April 4, 2024) - KWESST Micro Systems Inc. (NASDAQ: KWE) (NASDAQ: KWESW) (TSXV: KWE) (TSXV: KWE.WT.U) ("KWESST" or the "Company"), today announced the pricing of its underwritten public offering of 1,538,500 common shares (or pre-funded warrants ("Pre-funded Warrants") in lieu thereof) at a public offering price of $0.65 per share, for gross proceeds of approximately $1,000,000, before deducting underwriting discounts, commissions and offering expenses. All of the common shares and Pre-funded Warrants are being offered by the Company. The offering is expected to close on or about April 9, 2024, subject to satisfaction of customary closing conditions.

ThinkEquity is acting as sole book-running manager for the offering.

The Company intends to use the net proceeds from the offering primarily for working capital requirements, general corporate purposes and the advancement of its business objectives.

The securities will be offered and sold pursuant to a prospectus supplement to the Company's shelf registration statement on Form F-3 (File No. 333-277196), including a base prospectus, filed with the United States Securities and Exchange Commission (the "SEC") on February 20, 2024 and declared effective on March 4, 2024. The offering will be made only by means of a written prospectus. A prospectus supplement and accompanying prospectus describing the terms of the offering will be filed with the SEC on its website at www.sec.gov/edgar. Copies of the prospectus supplement and the accompanying prospectus relating to the offering may also be obtained, when available, from the offices of ThinkEquity, 17 State Street, 41^st Floor, New York, New York 10004.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

The offering remains subject to the final approval of the TSX Venture Exchange.

About KWESST

KWESST (NASDAQ: KWE) and (NASDAQ: KWESW) (TSXV: KWE) (FSE: 62U) develops and commercializes breakthrough next-generation tactical systems for military and security forces. The company's current portfolio of offerings includes digitization of tactical forces for real-time shared situational awareness and targeting information from any source (including drones) streamed directly to users' smart devices and weapons. Other KWESST products include countermeasures against threats such as electronic detection, lasers and drones. These systems can operate stand-alone or integrate seamlessly with OEM products and battlefield management systems, and all come integrated with TAK. The company also has a new proprietary non-lethal product line branded PARA OPSTM with application across all segments of the non-lethal market, including law enforcement. The Company is headquartered in Ottawa, Canada with operations in Guelph, Ontario Canada, and Youngsville, North Carolina, USA as well as representative offices in London, UK and Abu Dhabi, UAE.

For more information, please visit https://kwesst.com/.

Contact:

Kris Denis, CFO and Chief Compliance Officer: denis@kwesst.com 613.250.9752

David Luxton, Executive Chairman: luxton@kwesst.com

Sean Homuth, President and CEO: homuth@kwesst.com

Jason Frame, Investor Relations: frame@kwesst.com 587.225.2599

Forward-Looking Statements

This press release contains "forward-looking statements" and "forward-looking information" within the meaning of Canadian and United States securities laws (collectively, "forward-looking statements"), which may be identified by the use of words such as "plans", "is expected", "expects", "scheduled", "intends", "contemplates", "anticipates", "believes", "proposes" or variations (including negative and grammatical variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Such statements are based on the current expectations of KWESST's management and are based on assumptions and subject to risks and uncertainties. Although KWESST's management believes that the assumptions underlying such statements are reasonable, they may prove to be incorrect. The forward-looking events and circumstances discussed in this press release may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting KWESST, including KWESST's inability to secure contracts and fulfill staffing requirements, statements of work and orders for its products in 2024 and onwards for reasons beyond its control, the renewal or extension of agreements beyond their original term, the granting of patents applied for by KWESST, inability to finance the scale up to full commercial production levels for its physical products, inability to secure key partnership agreements to facilitate the outsourcing and logistics for its Arwen and PARA OPS products, ramp-up of the DSEF Program, consummation of the G7 military digitization contract, overall interest in KWESST's products being lower than anticipated or expected; general economic and stock market conditions; adverse industry events; loss of markets; future legislative and regulatory developments in Canada, the United States and elsewhere; the inability of KWESST to implement its business strategies; risks and uncertainties detailed from time to time in KWESST's filings with the Canadian Security Administrators and the SEC, and many other factors beyond the control of KWESST. Although KWESST has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. 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 KWESST undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its respective 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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/204447

FAQ

What is the pricing of KWESST Micro Systems Inc.'s underwritten public offering?

KWESST Micro Systems Inc. priced its underwritten public offering at $0.65 per share.

How many common shares were offered in KWESST Micro Systems Inc.'s underwritten public offering?

KWESST Micro Systems Inc. offered 1,538,500 common shares in its underwritten public offering.

What are the gross proceeds generated from KWESST Micro Systems Inc.'s underwritten public offering?

KWESST Micro Systems Inc.'s underwritten public offering generated gross proceeds of approximately $1,000,000.

Who is offering the common shares and Pre-funded Warrants in KWESST Micro Systems Inc.'s underwritten public offering?

All of the common shares and Pre-funded Warrants in KWESST Micro Systems Inc.'s underwritten public offering are being offered by the Company.

When is the closing date for KWESST Micro Systems Inc.'s underwritten public offering?

The offering is expected to close soon, as per KWESST Micro Systems Inc.'s announcement.