KWESST Micro Systems (KWE)

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KWESST Announces Intention to Change Corporate Name At Opening of Expanded New Facility
Newsfile· 2025-06-25 21:30
Core Viewpoint - KWESST Micro Systems Inc. intends to change its name to DEFSEC Technologies Inc. to better reflect its focus on defense and public security technology, with the name change expected to take effect around June 30, 2025, subject to regulatory approval [2][3]. Company Developments - The name change coincides with the opening of a new, larger facility in Kanata North, Ottawa, which is more than twice the size of the previous location and aims to accommodate the company's rapid growth [4]. - The company has received its first order for the Battlefield Laser Detection System from a military systems integrator for a North American armored vehicle program [5]. - The company is focusing on strategic, multi-year contracts with the Canadian Department of National Defence worth up to $75 million through 2028, in partnership with Thales and Akkodis [5]. Product Offerings - KWESST's product portfolio includes the ARWEN line of non-lethal products, which has reportedly saved hundreds of lives, and new PARA "Mini" and "Micro" versions currently under customer evaluation [5]. - The company offers real-time situational awareness solutions, including the Team Awareness Kit (TAK), which is being adopted by NATO countries [5]. - The "Lightning" version of the military-grade situational awareness capability is designed for the public security market and operates under a SaaS model, allowing users to access it on smart devices for a monthly subscription fee [5]. Shareholder Information - No action is required from shareholders regarding the name change, and there will be no change in the company's share capital [6]. - The new CUSIP and ISIN numbers for the common shares have been provided, and existing share certificates will not need to be exchanged [6]. Trading Information - The company's common share purchase warrants will also change trading symbols to "DFSC.WT.U" on the TSXV and "DFSCW" on the Nasdaq [7].
KWESST Receives Order For Prototypes Of Its Next-Generation Battlefield Laser Detection System For Major North American Armored Vehicle Program
Newsfile· 2025-06-18 13:09
Core Viewpoint - KWESST Micro Systems Inc. has received an order for prototypes of its next-generation battlefield laser detection system (BLDS) for a major North American armored vehicle program, marking a significant validation of its technology [2][3]. Company Overview - KWESST specializes in advanced tactical systems, focusing on the development and commercialization of next-generation military and security solutions [6]. - The company is headquartered in Ottawa, Canada, with additional offices in London, UK, and Abu Dhabi, UAE [7]. Product Development - The BLDS technology is designed to counter the increasing threats from laser-guided systems on the battlefield, such as Laser Target Designators and Laser Range Finders, which have enhanced the lethality of conventional weapons [3]. - The non-networked prototypes are ready for delivery and will undergo performance testing in various operational environments [4]. - Fully-networked versions of the BLDS, which will include real-time detection and classification capabilities, are expected to be available by fall 2025 [5]. Market Context - The modern battlefield has evolved, with lasers posing silent and invisible threats that can quickly target soldiers and vehicles [3]. - The BLDS aims to improve situational awareness and survivability for military personnel and high-value assets [3].
KWESST Micro Systems Reports Second Quarter 2025 Financial Results
Newsfile· 2025-05-16 11:30
Core Insights - KWESST Micro Systems Inc. reported a significant increase in revenue and a reduction in operating expenses for Q2 Fiscal 2025, indicating a successful pivot towards commercialization and operational efficiency [1][3][7] Financial Performance - Revenue for Q2 Fiscal 2025 reached CAD 1,264.2 thousand, a 160% increase compared to CAD 485.9 thousand in Q2 Fiscal 2024 [2][3] - Total revenue for the six months ended March 31, 2025, was CAD 2,151.8 thousand, up from CAD 614.9 thousand in the same period of the previous year [2] - Gross margin for Q2 Fiscal 2025 was CAD 314.0 thousand, with a gross margin percentage decrease from 50% in Q2 Fiscal 2024 to 25% in Q2 Fiscal 2025 [2][6] Operating Expenses - Operating expenses decreased by 36% year-over-year in Q2 Fiscal 2025, totaling CAD 2,048.6 thousand compared to CAD 3,187.0 thousand in Q2 Fiscal 2024 [2][3][4] - General and administrative expenses fell by CAD 580.4 thousand, primarily due to reduced professional fees and lower insurance premiums [9] - Research and development expenses decreased by CAD 405.7 thousand as the company transitioned from R&D to commercialization [9] Operational Efficiency - The operating loss for Q2 Fiscal 2025 was CAD 1.7 million, a 41% reduction from the previous year, attributed to increased revenue and decreased consulting and engineering costs [3][8] - The company reported a cash balance increase of 54% over Q1 Fiscal 2025, reaching CAD 4.4 million [1] Future Outlook - Management anticipates continued revenue growth driven by Canadian government defense contracts and the launch of new products, including ARWEN 40mm ammunition and PARA OPS [7][8]
KWESST Micro Systems (KWE) - 2025 Q2 - Quarterly Report
2025-05-16 10:11
[FINANCIAL STATEMENTS](index=3&type=section&id=FINANCIAL%20STATEMENTS) [Unaudited Condensed Consolidated Interim Statements of Financial Position](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Statements%20of%20Financial%20Position) The company's financial position at March 31, 2025, shows a significant increase in total assets and shareholders' equity compared to September 30, 2024, primarily driven by a substantial rise in cash and cash equivalents, while current liabilities decreased, improving working capital | Metric | March 31, 2025 (CAD) | September 30, 2024 (CAD) | Change (%) | | :-------------------------- | :--------------------- | :----------------------- | :--------- | | Total Assets | 9,587,489 | 5,617,148 | 70.7% | | Cash and cash equivalents | 4,408,844 | 256,828 | 1610.4% | | Current assets | 6,451,384 | 1,842,355 | 250.2% | | Total Liabilities | 2,804,544 | 4,248,861 | -34.0% | | Current liabilities | 1,563,091 | 2,975,581 | -47.5% | | Total Shareholders' Equity | 6,782,945 | 1,368,287 | 395.7% | | Accumulated deficit | (47,569,880) | (42,653,358) | 11.5% | [Unaudited Condensed Consolidated Interim Statements of Net Loss and Comprehensive Loss](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Statements%20of%20Net%20Loss%20and%20Comprehensive%20Loss) For the six months ended March 31, 2025, the company reported an increased net loss compared to the prior year, despite a significant rise in revenue, with operating loss decreasing but other expenses, particularly share issuance costs and changes in warrant liabilities, impacting the net loss | Metric (Six Months Ended March 31) | 2025 (CAD) | 2024 (CAD) | Change (%) | | :--------------------------------- | :----------- | :----------- | :--------- | | Revenue | 2,151,820 | 614,932 | 250.0% | | Cost of sales | (1,433,277) | (426,554) | 236.0% | | Gross margin | 718,543 | 188,378 | 281.4% | | Operating loss | (4,562,131) | (5,453,058) | -16.3% | | Share issuance costs | (1,807,686) | - | N/A | | Change in fair value of warrant liabilities | 1,437,396 | 1,497,832 | -4.0% | | Net loss | (4,916,522) | (3,939,176) | 24.8% | | Basic and diluted net loss per share | (16.11) | (144.63) | -88.9% | [Unaudited Condensed Consolidated Interim Statements of Changes in Shareholders' Equity](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) Shareholders' equity significantly increased from September 30, 2024, to March 31, 2025, primarily due to substantial share and warrant issuances from public offerings and private placements, which offset the accumulated deficit from net losses | Metric (Six Months Ended March 31, 2025) | Amount (CAD) | | :--------------------------------------- | :----------- | | Balance, September 30, 2024 | 1,368,287 | | Shares issued for public offering | 100,310 | | Shares issued for private placement | 371,154 | | Warrants issued for private placement | 2,394,955 | | Pre-funded warrants issued for public offering | 3,489,393 | | Pre-funded warrants issued for private placement | 4,579,154 | | Share offering costs | (1,835,961) | | Shares issued for debt | 100,000 | | Pre-funded warrants exercised | 789,173 | | Warrants exercised | 360,500 | | Net loss | (4,916,522) | | Balance, March 31, 2025 | 6,782,945 | [Unaudited Condensed Consolidated Interim Statements of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Statements%20of%20Cash%20Flows) For the six months ended March 31, 2025, the company experienced a significant net increase in cash and cash equivalents, primarily driven by substantial cash inflows from financing activities, which more than offset the cash used in operating and investing activities | Metric (Six Months Ended March 31) | 2025 (CAD) | 2024 (CAD) | Change (CAD) | | :--------------------------------- | :----------- | :----------- | :----------- | | Net loss | (4,916,522) | (3,939,176) | (977,346) | | Cash flows used in operating activities | (4,851,931) | (4,979,109) | 127,178 | | Cash flows used in investing activities | (58,710) | (69,407) | 10,697 | | Cash flows provided by financing activities | 9,062,657 | (94,759) | 9,157,416 | | Net change in cash and cash equivalents | 4,152,016 | (5,143,275) | 9,295,291 | | Cash and cash equivalents, end of period | 4,408,844 | 263,734 | 4,145,110 | - Significant cash inflows from financing activities in 2025: - Proceeds from U.S. Public Offering-November 2024: **$4,871,033** - Proceeds from Private Placement-November 2024: **$3,421,635** - Proceeds from Private Placement-February 2025: **$3,655,758**[7](index=7&type=chunk) [Notes to the Unaudited Condensed Consolidated Interim Financial Statements](index=7&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [1. Corporate information](index=7&type=section&id=1.%20Corporate%20information) KWESST Micro Systems Inc. develops next-generation technology solutions for military, public safety, and personal defense markets, aiming to protect and save lives, with its stock listed on TSX-V, Nasdaq, and Frankfurt Stock Exchange, and having undergone two reverse stock splits in 2024 and 2025 - KWESST develops and commercializes next-generation technology solutions for military, public safety agencies, and personal defense markets, with a core mission to protect and save lives[10](index=10&type=chunk) - KWESST's common stock is listed on the TSX Venture Exchange (KWE), Nasdaq Capital Market (KWE), and Frankfurt Stock Exchange (62U), while warrants are listed on Nasdaq (KWESW) and TSX-V (KWE.WT.U)[11](index=11&type=chunk) - Effected a **10-for-1 reverse stock split** on October 23, 2024, and a **21-for-1 reverse stock split** on April 23, 2025 (Nasdaq) and April 24, 2025 (TSX-V), with all financial information retrospectively adjusted for these splits[12](index=12&type=chunk)[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk) [2. Basis of preparation](index=7&type=section&id=2.%20Basis%20of%20preparation) The financial statements are prepared on a going concern basis, despite the company's history of significant losses and negative operating cash flows, with management's strategy focusing on revenue growth, product development, margin improvement, expense management, and securing additional capital to mitigate going concern risks, and the statements complying with IAS 34 and incorporating wholly-owned subsidiaries, with CAD as the functional currency - The financial statements are prepared assuming KWESST will continue as a going concern, despite incurring a **$4.9 million net loss** and **$4.9 million negative operating cash flows** for the six months ended March 31, 2025[16](index=16&type=chunk)[17](index=17&type=chunk) Working Capital and Accumulated Deficit | Metric | March 31, 2025 (CAD) | September 30, 2024 (CAD) | | :--------------- | :------------------- | :----------------------- | | Working capital | 4.9 million | (1.1 million) | | Accumulated deficit | 47.6 million | 42.7 million | - The company's strategy to mitigate going concern risks includes focusing on revenue growth, product development, improving gross margin, managing operating expenses, and securing additional capital[18](index=18&type=chunk) - These unaudited condensed consolidated interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting, as issued by the IASB[21](index=21&type=chunk) - KWESST consolidates its wholly-owned subsidiaries, including entities in Canada and the United States, and presents its financial statements in Canadian dollars (CAD), which is the parent company's functional currency[26](index=26&type=chunk)[27](index=27&type=chunk) - Certain comparative figures for net loss and comprehensive loss were reclassified to conform to current period presentation, with no impact on net loss or shareholders' equity[34](index=34&type=chunk) [3. Material accounting policies](index=10&type=section&id=3.%20Material%20accounting%20policies) The accounting policies applied during the six months ended March 31, 2025, are consistent with those used in the Annual Financial Statements - The accounting policies in these unaudited condensed consolidated interim financial statements are the same as those applied in the Annual Financial Statements[35](index=35&type=chunk) [4. Trade and other receivables](index=10&type=section&id=4.%20Trade%20and%20other%20receivables) Trade and other receivables significantly increased at March 31, 2025, compared to September 30, 2024, primarily driven by a rise in trade receivables, with an impairment of $8,096 recorded for the current period Trade and Other Receivables | Metric | March 31, 2025 (CAD) | September 30, 2024 (CAD) | Change (%) | | :---------------- | :------------------- | :----------------------- | :--------- | | Trade receivables | 997,553 | 455,049 | 119.2% | | Unbilled revenue | 150 | 42,248 | -99.6% | | Sales tax recoverable | 84,161 | 70,578 | 19.2% | | Total | 1,081,864 | 567,875 | 90.5% | - An impairment of trade and other receivables of **$8,096** was recorded during the three and six months ended March 31, 2025[36](index=36&type=chunk) [5. Inventories](index=10&type=section&id=5.%20Inventories) Total inventories increased slightly at March 31, 2025, compared to September 30, 2024, mainly due to an increase in raw materials, while finished goods and work-in-progress saw minor decreases, with no impairment of inventories recorded Inventories Breakdown | Metric | March 31, 2025 (CAD) | September 30, 2024 (CAD) | Change (%) | | :-------------- | :------------------- | :----------------------- | :--------- | | Finished goods | 50,538 | 55,754 | -9.4% | | Work-in-progress | 49,416 | 59,519 | -17.0% | | Raw materials | 481,242 | 417,890 | 15.1% | | Total | 581,197 | 533,163 | 9.0% | - No impairment of inventories was recorded during the three and six months ended March 31, 2025[39](index=39&type=chunk) [6. Intangible assets](index=11&type=section&id=6.%20Intangible%20assets) Intangible assets decreased from $3,174,832 at September 30, 2024, to $2,725,138 at March 31, 2025, primarily due to amortization, with minor additions, and management concluded no impairment indication at March 31, 2025 Total Intangible Assets | Metric (Intangible Assets) | March 31, 2025 (CAD) | September 30, 2024 (CAD) | Change (%) | | :------------------------- | :------------------- | :----------------------- | :--------- | | Total Intangible Assets | 2,725,138 | 3,174,832 | -14.2% | - Additions to intangible assets totaled **$26,675**, while amortization amounted to **$(476,369)** for the period[41](index=41&type=chunk) - Management concluded there was no indication of impairment on the intangible assets at March 31, 2025[41](index=41&type=chunk) [7. Accounts payable and accrued liabilities](index=11&type=section&id=7.%20Accounts%20payable%20and%20accrued%20liabilities) Accounts payable and accrued liabilities significantly decreased from $1,660,637 at September 30, 2024, to $1,122,180 at March 31, 2025, driven by reductions in trade payables and accrued liabilities, partially offset by an increase in salary and vacation payable and the establishment of a warranty reserve Accounts Payable and Accrued Liabilities | Metric | March 31, 2025 (CAD) | September 30, 2024 (CAD) | Change (%) | | :-------------------------- | :------------------- | :----------------------- | :--------- | | Trade payable | 383,123 | 881,835 | -56.5% | | Accrued liabilities | 465,498 | 610,558 | -23.7% | | Warranty Reserve | 13,900 | - | N/A | | Salary and vacation payable | 259,659 | 168,244 | 54.3% | | Total | 1,122,180 | 1,660,637 | -32.5% | [8. Related party transactions](index=11&type=section&id=8.%20Related%20party%20transactions) Outstanding accounts payable and accrued liabilities due to officers and directors decreased significantly from September 30, 2024, to March 31, 2025, and a royalty payment of $200,000 due in April 2025 was paid early to a related party (DEFSEC) in December 2024 for a reduced net payment of $175,000 Related Party Payables | Metric | March 31, 2025 (CAD) | September 30, 2024 (CAD) | Change (%) | | :----------------------------------------- | :------------------- | :----------------------- | :--------- | | Accounts payable and accrued liabilities due to officers and directors | 96,651 | 471,465 | -79.5% | - An LEC royalty payment of **$200,000** due in April 2025 was paid early in December 2024 to DEFSEC, a related party, for a reduced net payment of **$175,000**[43](index=43&type=chunk) [9. Contract liabilities](index=11&type=section&id=9.%20Contract%20liabilities) Contract liabilities slightly increased from $120,571 at September 30, 2024, to $122,612 at March 31, 2025, with the company recognizing $41,072 of deferred revenue from the beginning of the period and invoicing/deferring $43,113 during the period Contract Liabilities Movement | Metric | March 31, 2025 (CAD) | September 30, 2024 (CAD) | Change (%) | | :-------------------------- | :------------------- | :----------------------- | :--------- | | Balance, beginning of period | 120,571 | 120,970 | -0.3% | | Amounts invoiced and revenue deferred | 43,113 | 108,573 | -60.3% | | Recognition of deferred revenue | (41,072) | (108,972) | -62.3% | | Balance, end of period | 122,612 | 120,571 | 1.7% | [10. Warrant liabilities](index=12&type=section&id=10.%20Warrant%20liabilities) Warrant liabilities significantly decreased from $847,295 at September 30, 2024, to $177,327 at March 31, 2025, primarily due to the initial recognition of new warrants, subsequent exercises, and a substantial transfer of pre-funded warrants to equity after their exercise price was converted to CAD denomination Warrant Liabilities Movement | Metric (Six Months Ended March 31, 2025) | Amount (CAD) | | :--------------------------------------- | :----------- | | Balance, beginning of period | 847,295 | | Initial recognition | 4,770,722 | | Exercised | (779,578) | | (Gain) Loss on revaluation of financial instruments | (1,437,396) | | Exchange (gain) loss on revaluation | 78,209 | | Extinguish Warrant Liability/Transfer to equity | (3,301,925) | | Balance, end of period | 177,327 | - Warrants are classified as financial liabilities under IFRS because their exercise price is denominated in U.S. dollars, differing from the company's functional currency (CAD)[48](index=48&type=chunk)[52](index=52&type=chunk)[57](index=57&type=chunk) - On November 12, 2024, pre-funded warrants were converted to CAD denomination, leading to their reclassification from warrant liabilities to equity, extinguishing **$3,301,925** in liability[58](index=58&type=chunk) [11. Share Capital and Contributed Surplus](index=14&type=section&id=11.%20Share%20Capital%20and%20Contributed%20Surplus) Share capital and contributed surplus saw significant changes due to multiple public offerings and private placements, debt settlements, and warrant exercises, with the company issuing a substantial number of common shares and warrants, leading to increased share capital and contributed surplus, while also incurring significant share issuance costs Share Capital Movement | Metric (Share Capital) | March 31, 2025 (CAD) | September 30, 2024 (CAD) | | :------------------------------ | :------------------- | :----------------------- | | Balance at period end | 43,197,908 | 37,822,725 | | Issued for U.S. Public Offering | 100,310 | N/A | | Issued for U.S. Private Placement | 371,154 | N/A | | Issued for debt settlements | 100,000 | N/A | | Issued for warrant exercise | 4,967,918 | N/A | | Share issuance costs | (164,199) | N/A | Warrants Outstanding | Metric (Warrants) | March 31, 2025 | September 30, 2024 | | :-------------------------------- | :------------- | :----------------- | | Outstanding warrants | 22,243,051 | 11,600,598 | | Issued warrants | 19,521,653 | N/A | | Exercised warrants | (8,304,200) | N/A | | Expired warrants | (575,000) | N/A | | Weighted average exercise price | $4.00 | $3.23 | - **7,954,200 pre-funded warrants** and **350,000 November 2024 Common Warrants** were exercised, increasing share capital by **$4,700,168**[102](index=102&type=chunk) - Contributed surplus includes issued broker compensation options and cumulative amortized share-based compensation, with share-based compensation for the six months ended March 31, 2025, being **$77,397**[105](index=105&type=chunk)[108](index=108&type=chunk) [12. Loss per share](index=24&type=section&id=12.%20Loss%20per%20share) The basic and diluted net loss per share for the six months ended March 31, 2025, was $(16.11), an improvement from $(144.63) in the prior year, primarily due to a significant increase in the weighted average number of shares outstanding following multiple share issuances and reverse stock splits, with all dilutive securities being anti-dilutive due to the net loss Net Loss Per Share | Metric (Six Months Ended March 31) | 2025 (CAD) | 2024 (CAD) | | :--------------------------------- | :--------- | :--------- | | Net loss per share (Basic and diluted) | (16.11) | (144.63) | | Weighted average number of shares outstanding | 305,190 | 27,236 | - All dilutive securities (warrants, pre-funded warrants, and stock options) were anti-dilutive for the periods presented due to the net loss incurred[110](index=110&type=chunk) [13. Revenue](index=25&type=section&id=13.%20Revenue) Total revenue for the six months ended March 31, 2025, significantly increased to $2,151,820 from $614,932 in the prior year, primarily driven by strong growth in the Digitization product line, especially in the Canadian market - KWESST generates revenue from the sale of products to its customers[111](index=111&type=chunk) Revenue by Product Line and Geography | Metric (Six Months Ended March 31) | 2025 (CAD) | 2024 (CAD) | Change (%) | | :--------------------------------- | :---------- | :---------- | :--------- | | Total Revenue | 2,151,820 | 614,932 | 250.0% | | **Major products / service lines:** | | | | | Digitization | 1,785,769 | 373,486 | 378.2% | | Non-Lethal | 365,124 | 240,484 | 51.8% | | **Primary geographical markets:** | | | | | Canada | 2,056,456 | 541,844 | 279.5% | | United States | 95,364 | 73,088 | 30.5% | - Contracted not yet recognized revenue at March 31, 2025, was **$109,181**, with **100%** expected to be recognized over the next 12 months[112](index=112&type=chunk) - For the six months ended March 31, 2025, three customers accounted for **64.76%**, **9.96%**, and **8.27%** of revenue[113](index=113&type=chunk) [14. Net finance costs](index=25&type=section&id=14.%20Net%20finance%20costs) Net finance costs for the six months ended March 31, 2025, increased to $93,420 from $74,855 in the prior year, primarily due to higher accretion costs for accrued royalties liability and lease obligations, partially offset by increased interest income Net Finance Costs | Metric (Six Months Ended March 31) | 2025 (CAD) | 2024 (CAD) | Change (%) | | :--------------------------------- | :--------- | :--------- | :--------- | | Accretion cost - accrued royalties liability | 84,826 | 89,931 | -5.7% | | Lease obligations | 23,093 | 37,861 | -39.0% | | Total financing costs | 114,372 | 128,486 | -11.0% | | Interest income | (21,452) | (53,631) | -59.9% | | Net finance costs | 93,420 | 74,855 | 24.8% | [15. Financial instruments](index=26&type=section&id=15.%20Financial%20instruments) The company's financial risks remained largely unchanged, except for foreign currency and liquidity risks, with KWESST exposed to U.S. dollar currency fluctuations due to financing activities and operations, and managing liquidity with $4.4 million in cash and $4.9 million in working capital at March 31, 2025 - KWESST is exposed to U.S. dollar currency risk due to financing activities (public offerings, private placements) and operational transactions (revenues, raw materials) denominated in USD[116](index=116&type=chunk) Net US Dollar Exposure | Metric (March 31, 2025) | Amount (CAD) | | :---------------------- | :----------- | | Net US dollar exposure | 2,540,654 | | Impact to profit or loss if 5% movement in the US dollar | 127,033 | - The company recorded a foreign exchange gain of **$191,106** for the six months ended March 31, 2025[117](index=117&type=chunk) Liquidity Position | Metric (Liquidity) | March 31, 2025 (CAD) | September 30, 2024 (CAD) | | :---------------------- | :------------------- | :----------------------- | | Cash and cash equivalents | 4.4 million | 0.3 million | | Working capital | 4.9 million | (1.1 million) | Contractual Obligations | Contractual Obligations (March 31, 2025) | Total (CAD) | | :--------------------------------------- | :---------- | | Minimum royalty commitments | 2,000,000 | | Accounts payable and accrued liabilities | 1,122,180 | | Lease obligations | 205,589 | | Total | 3,327,769 | [16. Supplemental cash flow information](index=27&type=section&id=16.%20Supplemental%20cash%20flow%20information) Non-cash working capital items resulted in a cash outflow of $(1,188,324) for the six months ended March 31, 2025, primarily due to increases in trade and other receivables, prepaid expenses, and decreases in accounts payable, with several non-cash items related to share issuance costs and warrant expiry excluded from the cash flow statements Changes in Non-Cash Working Capital | Changes in Non-Cash Working Capital (Six Months Ended March 31) | 2025 (CAD) | 2024 (CAD) | | :------------------------------------------------ | :----------- | :----------- | | Trade and other receivables | (513,989) | (261,971) | | Inventories | (48,034) | (70,451) | | Prepaid expenses and deposits | (154,074) | (118,178) | | Accounts payable and accrued liabilities | (464,191) | 107,564 | | Total | (1,188,324) | (368,103) | - Non-cash items excluded from the cash flow statements for the six months ended March 31, 2025, include shares issued for debt settlement (**$100,000**), non-cash share issuance costs (**$187,468**, **$221,088**, **$114,046**), and the expiry of **200,000 warrants**[120](index=120&type=chunk) [17. Commitments and contingencies](index=28&type=section&id=17.%20Commitments%20and%20contingencies) As of March 31, 2025, there were no commitments and contingencies other than the royalty payment disclosed in Note 15 - There were no commitments and contingencies at March 31, 2025, other than the royalty payment disclosed in Note 15[121](index=121&type=chunk) [18. Segmented information](index=28&type=section&id=18.%20Segmented%20information) KWESST operates as a single operating segment, with its Chairman acting as the chief operating decision maker who evaluates performance and allocates resources at a consolidated level, and all property and equipment located in Canada, except for certain assets no longer held in the United States - KWESST has determined that it has only one operating segment, with its Chairman identified as the chief operating decision maker[122](index=122&type=chunk) - At March 31, 2025, all property and equipment are located in Canada, with the right-of-use asset and equipment in the United States no longer held[123](index=123&type=chunk) [19. Key management compensation](index=28&type=section&id=19.%20Key%20management%20compensation) Key management compensation for the six months ended March 31, 2025, significantly increased to $1,354,546 from $618,270 in the prior year, driven by higher short-term compensation and directors' fees Key Management Compensation | Metric (Six Months Ended March 31) | 2025 (CAD) | 2024 (CAD) | Change (%) | | :--------------------------------- | :---------- | :---------- | :--------- | | Short-term key management compensation | 929,583 | 274,167 | 239.1% | | Share-based payments | 49,963 | 59,103 | -15.4% | | Directors' fees | 375,000 | 285,000 | 31.6% | | Total | 1,354,546 | 618,270 | 119.1% | [20. Subsequent Events](index=28&type=section&id=20.%20Subsequent%20Events) Subsequent to March 31, 2025, all 2,884,179 pre-funded warrants from the February 2025 Private Placement were exercised, resulting in the issuance of 137,342 common shares, leaving a total of 151,764 pre-funded warrants outstanding - Subsequent to March 31, 2025, all **2,884,179 pre-funded warrants** from the February 2025 Private Placement were exercised at **$0.021 per common share**[125](index=125&type=chunk) - These exercises resulted in the issuance of **137,342 common shares**, leaving **151,764 total remaining outstanding pre-funded warrants**[125](index=125&type=chunk)
KWESST Announces Clarification of its Share Consolidation and Effectiveness
Newsfile· 2025-04-23 13:57
Ottawa, Ontario--(Newsfile Corp. - April 23, 2025) - KWESST Micro Systems Inc. (TSXV: KWE) (TSXV: KWE.WT.U) (NASDAQ: KWE) (NASDAQ: KWESW) ("KWESST" or the "Company") previously announced that, subject to the final approval of the TSX Venture Exchange (the "TSXV"), that it will effect a consolidation of the Company' issued and outstanding common shares (each, a "Share") on the basis of twenty- one (21) pre-consolidation Shares for each one (1) post-consolidation Share (the "Consolidation"). For more informat ...
KWESST Announces 1-for-21 Share Consolidation
Newsfile· 2025-04-21 11:30
Core Viewpoint - KWESST Micro Systems Inc. will consolidate its common shares at a ratio of 21 pre-consolidation shares for 1 post-consolidation share, effective April 23, 2025, to comply with Nasdaq's minimum bid price requirements [1][5][8]. Group 1: Share Consolidation Details - The consolidation was approved by shareholders on March 31, 2025, with a maximum ratio of 25 pre-consolidation shares for 1 post-consolidation share, but the Board decided on a 21:1 ratio [2]. - Currently, there are 11,137,638 shares issued and outstanding, which will reduce to approximately 530,363 shares post-consolidation [3]. - No fractional shares will be issued; fractions will be rounded to the nearest whole number [4]. Group 2: Purpose and Impact - The primary purpose of the consolidation is to increase the share price to meet Nasdaq's continued listing requirements [5][8]. - The consolidation will not affect the number of outstanding share purchase warrants, but the number of shares per warrant will be adjusted to 21 warrants for 1 post-consolidation share, with an increased exercise price of US$1,050.00 [7]. - The exercise price and number of shares for other convertible securities will also be proportionately adjusted [8]. Group 3: Company Overview - KWESST develops next-generation tactical systems for military and security forces, including digitization of tactical forces and countermeasures against various threats [9][10]. - The company is headquartered in Ottawa, Canada, with offices in London, UK, and Abu Dhabi, UAE [10].
KWESST Announces Results of Special Shareholder Meeting
Newsfile· 2025-04-01 11:30
Core Points - KWESST Micro Systems Inc. held a special meeting of shareholders on March 31, 2025, to address compliance with Nasdaq's minimum bid price requirement [1] - Shareholders approved a resolution for the consolidation of common shares at a ratio of one share for every twenty-five shares [2] - The board of directors will determine the timing for the consolidation and will announce the final share ratio soon [3] Company Overview - KWESST develops next-generation tactical systems for military and security forces, focusing on real-time situational awareness and targeting information [4] - The company's product portfolio includes countermeasures against electronic detection, lasers, and drones, as well as a new non-lethal product line branded PARA OPSTM [4] - KWESST is headquartered in Ottawa, Canada, with offices in London, UK, and Abu Dhabi, UAE [4]
KWESST Contracts U.S.-Based Nordon Inc. for the Manufacture of New ARWEN(TM) Products - Ensuring Highest Quality, Short Lead Times, and Tariff-Free Production
Newsfile· 2025-03-28 12:53
Core Viewpoint - KWESST Micro Systems Inc. has announced a strategic partnership with U.S.-based Nordon Inc. to enhance its manufacturing capabilities in the United States, aiming to improve product availability and reduce trade barriers while supporting local employment and law enforcement agencies [1][2][3][4]. Group 1: Partnership and Manufacturing Expansion - KWESST has signed a non-binding memorandum of understanding with Nordon Inc. to establish a long-term contract manufacturing arrangement by June 1, 2025 [2]. - The partnership will focus on the production of ARWEN™ less-lethal products, with Nordon already completing tooling for the majority of components related to PARA OPS™ cartridges and projectiles [3]. - This collaboration is expected to strengthen KWESST's U.S. presence and enhance supply chain efficiency while ensuring high-quality production [3][4]. Group 2: Economic and Employment Impact - The partnership with Nordon, a HUBZone-certified manufacturer, is anticipated to drive local employment and support economic development in distressed areas [3]. - KWESST's commitment to U.S. manufacturing is expected to create jobs and contribute to economic growth while providing American-made products to law enforcement [4][6]. Group 3: Strategic Goals and Market Positioning - KWESST aims to enhance product availability and streamline logistics through domestic manufacturing, reinforcing its commitment to quality solutions for law enforcement and civilian markets [4]. - The strategic expansion into U.S. manufacturing addresses logistical challenges and regulatory compliance barriers, ensuring smoother market access for public safety solutions [4]. - KWESST remains committed to maintaining and expanding its manufacturing footprint in Canada for products destined for the Canadian market [4][7].
KWESST Provides Context on Special Shareholder Meeting Scheduled on March 31 in Connection with a Proposed Share Consolidation
Newsfile· 2025-03-18 12:37
Core Viewpoint - KWESST Micro Systems Inc. is convening a special shareholder meeting on March 31, 2025, to seek approval for a proposed share consolidation aimed at regaining compliance with Nasdaq's Minimum Bid Price Requirement [1][2][5]. Group 1: Shareholder Meeting Details - The special meeting will take place on March 31, 2025, at 4:00 PM Eastern Time, with relevant materials available on SEDAR+ and the company's website [1]. - Shareholders will vote on the "Consolidation Resolution," which proposes consolidating the company's common shares on a basis of one share for every twenty-five shares outstanding [2][5]. Group 2: Background on Share Consolidation - The need for consolidation arises from a notification received on May 16, 2024, indicating non-compliance with Nasdaq Listing Rule 5550(a)(2) due to the company's share price being below US$1.00 for 30 consecutive business days [3]. - Following a previous consolidation on October 23, 2024, the company was granted an additional 180-day period until May 12, 2025, to regain compliance with the Minimum Bid Price Requirement [4]. Group 3: Implications of Non-Approval - If the Consolidation Resolution is not approved, the company risks serious consequences, including potential delisting from Nasdaq if the share price remains below US$1.00 [6]. - The company asserts that the consolidation is in the best interests of shareholders to ensure compliance with Nasdaq's requirements [7].
KWESST Micro Systems Inc. Announces Upsizing of Private Placement and Closing of First Tranche
Newsfile· 2025-02-22 03:25
Core Points - KWESST Micro Systems Inc. has closed the first tranche of a private placement, raising approximately CAD$3.5 million (around US$2.5 million) [1] - The first tranche included the issuance of 903,700 common shares and 2,884,179 pre-funded warrants at a price of CAD$0.928 (approximately US$0.66) per share or warrant [2] - Each common share or pre-funded warrant was bundled with a common share purchase warrant, exercisable at CAD$1.16 (approximately US$0.817) for 60 months [2] - The company paid a cash fee of CAD$263,636 (7.5% of gross proceeds) and issued 189,394 warrants to ThinkEquity as compensation for services rendered [3] - Due to investor interest, KWESST is increasing the offering size with a second tranche expected to close on or before February 25, 2025, raising an additional CAD$142,070 (approximately US$100,000) [4] - The net proceeds from the offering will be used for general working capital purposes [4] - The securities offered have not been registered under the U.S. Securities Act and cannot be sold in the U.S. without registration or exemption [6] Company Overview - KWESST develops and commercializes next-generation tactical systems for military and security forces, including digitization of tactical forces and countermeasures against various threats [8] - The company is headquartered in Ottawa, Canada, with offices in London, UK, and Abu Dhabi, UAE [8]