March 1st – 2022 – Ottawa – KWESST Micro Systems Inc. (TSXV: KWE and OTCQB: KWEMF) (“KWESST” or “the Company”) today provided a comprehensive corporate update on progress and developments, including a stronger outlook for Company products in the face of a changing operating environment.
“In the past days and weeks, we’ve witnessed a fundamental re-set in the operating environment,” said David Luxton, Executive Chairman of KWESST. “Hostilities overseas and the spread of trucker protests domestically are accelerating requests and potential orders for virtually all products and services across our three business segments.” The Company said it expects this re-set to be enduring, with long-term effects and increased demand for the kind of next-generation tactical systems KWESST provides.
Three business segments
The immediate effect of events like the trucker protests has been a pronounced increase in demand by law enforcement agencies for non-lethal equipment. As announced February 22, the Company’s ARWEN TM anti-riot equipment was used at the trucker protest in Ottawa, Canada to help bring a safe conclusion to the incident. The Company is now processing numerous quote requests for replenishment and expansion of anti-riot equipment.
The Company’s new non-lethal PARA OPSTM unveiled at the 2022 SHOT Show in Las Vegas, Jan 18-21, will see first production samples commencing mid-March for customer demonstrations and evaluations,
and full production commencing by late summer through outsourced third-party contractors with facilities in the U.S. and Canada. As well, in order to accelerate the time to market for its PARA OPS products and begin taking orders, KWESST has initiated an interim self-classification process in parallel with a formal classification application to the Bureau of Alcohol, Tobacco, Firearms and Explosives, with outside assistance from expert professionals.
Following the establishment of KWESST’s Center of Excellence for digitization of soldier systems , several OEMs initiated discussions with KWESST for other requirements, including integration of systems for military as well as public security applications. Some of these discussions are at an advanced stage, with announcements expected in the near future.
These discussions are in addition to the already announced signing of a master professional services agreement with General Dynamics General Dynamics Mission Systems – Canada (“GDMS”) to support the development of digitization solutions for future Canadian land C4ISR programs under Strong, Secure, Engaged: Canada’s defence policy, with government procurements estimated at $3-billion to $5-billion over five years. Under the master agreement with an initial order estimated at approximately $1 million, KWESST will assist in the development of an initial prototype system that networks soldiers with information from various sources in real time, including location of friendly forces and adversaries, and facilitates more effective, coordinated fire.
Recent articles in military magazines on the future of soldier digitization and KWESST’s capabilities can be found here:
The invasion of Ukraine by Russia has been a major recent catalyst for KWESST’s PhantomTM electronic decoy, with several pending requests and price quotations to fill Urgent Operational Requirements (“UOR”) for NATO forces. The level of interest and the urgency encourages the Company to believe that it is highly likely it could receive NATO country orders throughout its 2022 fiscal year and beyond.
This is in addition to the decision by General Dynamics Land Systems (“GDLS”) to select PhantomTMfor a new vehicle program submission to the U.S. military as announced on November 12, 2021. Over the next 15 months, the KWESST engineering team will be working in close collaboration with GDLS to support readying a prototype vehicle with Phantom on board for trials by its U.S. military customer in the first part of 2023. The Phantom capability will be designed to meet evolving electro-magnetic spectrum operations (EMSO) tactics, techniques and procedures to be employed by vehicle operators in an RF contested environment.
Should GDLS be the successful bidder for the planned follow-on production program, and include the Phantom, the potential value to KWESST could be USD $40-million or more, depending on the number of Phantom units per vehicle.
Hostilities are creating similar interest in the Company’s Battlefield Laser Defense System (“BLDS”) that detects and locates lasers, including weaponized lasers, with first orders from two overseas NATO countries pending.
Domestic protests have intensified law enforcement requirements for Counter-UAS (“CUAS”) against drones used by protesters. The Company is currently in discussions with potential industry partners and customers to partner and adapt its confidential GhostNet TM system for domestic public security requirements.
Expanded OEM engagement
As stated on many occasions, a key part of KWESST’s go-to-market plan is to partner with major defense contractors, as it has done with GDMS and GDLS. Similar agreements are in progress with other OEMs that KWESST believes could result in expansion into other products and markets internationally. The first such announcements are expected early in our third quarter starting April 1st, 2022.
International market development
With the easing of pandemic travel restrictions, the defense industry is resuming trade shows, and KWESST is once again able to exhibit and meet with customers, OEMs and international sales representatives. This includes the following major international events for 2022: World Defense, Riyadh Saudi Arabia 6-9 March; UK Security & Policing Farnham, UK 15-17 March; SOFIC Special Operations Expo, Tampa FL 16-19 May; CANSEC, Ottawa 1-2 June; Eurosatory, Paris 13-17 June; AUSA, Washington DC 10-12 Oct; and SOFEX, Amman, Jordan 31 Oct-31-4 Nov. In conjunction, the Company is launching an outreach program to its extensive network of international sales reps and agents, commencing March 2022.
New web site, videos
The Company said it expects to launch a new web site by mid-March and meanwhile has posted some short product video clips here:
Phantom Tactical Electro-Magnetic Spectrum Operations (EMSO)
Battlefield Laser Detection Systems
More videos will follow so that customers and investors have the benefit of visualizing what KWESST means with its promise of “Next-Generation Tactical Systems”.
Filing of Fiscal 2022 Q1 financials
The Company reported that it has filed its financial statements for its first quarter period ending 31 December, 2021 and those are available at www.sedar.com
About PARA OPS
The patent-pending PARA OPS technology is a breakthrough in non-lethal systems. It combines the reliability of a cartridge with a polymer projectile in a low-energy self-stabilizing configuration for accuracy. There is no gunpowder, compressed air or CO2. Projectiles come in a choice of payloads appropriate to the mission, whether personal defense, public order or realistic tactical simulation. Cartridges fire from a low-cost dedicated launcher that can look like a firearm, a TV remote control, a flashlight, or any hybrid or custom design. Launchers fire only PARA OPS cartridges and will not accept live ammunition. Projectile payloads include incapacitating pepper powder, inert colored powder for training, and solid slugs for practice or pain compliance.
KWESST develops and commercializes breakthrough next-generation tactical systems that meet the requirements of security forces and personal defense for overmatch capability against adversaries. The company’s current portfolio of unique proprietary offerings include its unique non-lethal Low Energy Cartridge (LEC) system with application across all segments of the non-lethal market, including law enforcement and personal defence. KWESST is also engaged in the digitization of tactical forces for shared situational awareness and targeting with its signature TASCSTM (Tactical Awareness and Situational Control System) for real-time awareness and targeting information from any source (including drones) streamed directly to users’ smart devices and weapons. Other KWESST products include counter-measures against threats such as drones, lasers and electronic detection. These include the autonomous GreyGhostTM soldier-portable micro drone missile system that defends against small hostile drones including swarms using high-speed kinetic impact; a Ground Laser Defence system to counter the emerging threat of weaponized lasers against personnel and the PhantomTM electronic battlefield decoy system to mask the electromagnetic signature of friendly forces with decoy signatures at false locations to deceive and confuse adversaries. These systems can operate stand-alone or integrate seamlessly with OEM products and battlefield management systems. The Company is headquartered in Ottawa, Canada, with operations in Stafford, VA and representative offices in London, UK and Abu Dhabi, UAE. KWESST trades on the TSX Venture Exchange under the symbol KWE and on the U.S. OTCQB under the symbol KWEMF.
Contact: Jason Frame, Investor Relations: firstname.lastname@example.org
For more information, please visit https://www.kwesst.com/
Cautionary Note Regarding Forward-Looking Statements
This news release includes certain “forward-looking statements” under applicable Canadian securities legislation for the purpose of providing information about management’s current expectations and plans relating to the future. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. KWESST disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Neither TSX Venture Exchange nor its 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 news release.
KWESST deveops and commercializes high-value ultra-miniaturized technology applications that make a critical difference to the safety and operational effectiveness of personnel in the defence and security community. The company’s current portfolio of unique proprietary offerings include: its signature TASCS™ (Tactical and Situational Control System) for real-time awareness and targeting information from any source (including drones) streamed directly to users’ smart devices and weapons; the autonomous Grey Ghost™ kinetic impact missile system that defends against small hostile drones including swarms; a Ground Laser Defence system to counter the emerging threat of weaponized lasers against personnel; and, the Phantom™ Tactical Electronic Decoy to mask the electromagnetic signature of friendly forces with decoy “phantom” signatures at false locations to deceive and confuse adversaries. All systems can operate stand-alone or integrate seamlessly with OEM products and battlefield management systems including Frontline, Edge, Killswitch and ATAK (Android Tactical Assault Kit) among others. KWESST also has developmental “smart ordnance” projects including its “Shot Counter” system, which records the number and type of rounds fired, for optimized firearms maintenance and performance. The Company is headquartered in Ottawa, Canada, with representative offices in Washington, DC, London, UK and Abu Dhabi, UAE.
The Company trades on the TSXV exchange under the symbol KWE. For more information please visit kwesst.com.