KWESST Micro Systems Inc (CVE:KWE) (OTCMKTS:KWEMF) announced that it has agreed to acquire Low Energy Cartridge (LEC) technology, a proprietary non-lethal munitions technology system, from privately-held DEFSEC Corporation, a company owned by the KWESST executive chairman David Luxton.
The company said it will issue one million KWESST shares plus 500,000 KWESST share purchase warrants, exercisable at a price of $0.70 per share, to DEFSEC in exchange for the LEC Technology.
“We see the LEC Technology as having universal application across four market segments that currently use a variety of dated ‘non-lethal’ or ‘less-lethal’ products, each having a vast global market,” KWESST Micro Systems CEO Jeff MacLeod said in a statement.
He added: “These segments are (i) public order (riots and control of dangerous subjects), (ii) military and law enforcement training (realistic force-on-force training), (iii) personal defence (home, car, boat, RV, camping, hiking), and (iv) high-action gaming.”
“The kind of fatalities that have led to widespread protests in the US are just one example of the need for more advanced solutions that enable law enforcement to engage with more benign devices from a safer stand-off distance and ensure that everyone goes home alive.”
KWESST also noted that as part of the purchase agreement DEFSEC will be entitled to a 7% royalty on annual sales of the LEC Technology, net of taxes, duties, customs brokerage fees, shipping and handling costs, customer credits, discounts and returns, up to a cumulative maximum of $10 million.
As well, the warrants issued to DEFSEC shall vest as to 25% on the first anniversary of the closing of the LEC Technology acquisition and 25% on each of the subsequent three anniversaries of the completion of the LEC Technology acquisition.
KWESST has a diversified product line, springing from a single core technology — its proprietary Micro Integrated Sensor Systems Technology (MISST) — which involves ultra-miniaturization and integration of sensors, software, optics, ballistics, machine learning and artificial intelligence that boosts mission capability.
The company also has a Tactical and Situational Control System (TASCS), which streams real-time awareness and targeting information from any source (including drones) directly to a soldier’s smart device and weapon.
Contact Sean at firstname.lastname@example.org