KWESST Increases Financing

About this update from Defsec Technologies Inc.

KWESST Increases FinancingNOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR RELEASE, PUBLICATION, DISTRIBUTION OR DISSEMINATION DIRECTLY, OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATESOttawa, Ontario--(Newsfile Corp. - March 15, 2022) - KWESST Micro Systems Inc. (TSXV: KWE) ("KWESST" or the "Company") today said that it has closed additional subscriptions of the non-secured loan (the "Loan") financing announced on March 14th, 2022. These additional subscriptions in the amount of $200,000, bring the total amount raised through the Loan financing to $2.0 million.The Loan bears interest at a rate of 9.0% per annum, compounded monthly and not in advance, and has a maturity of thirteen months, with the Company having the option to repay the whole or any part of the Loan, without penalty or premium, at any time prior to the close of business on the maturity date. As part of the closing of the additional subscriptions announced today, KWESST issued an aggregate of 100,000 common shares to the lenders, being an amount equal to twenty percent (20%) of the total dollar amount of the Loan divided by the market price of the Company's common shares on the TSX Venture Exchange (the "Exchange") at market close on March 14th, 2022, being $0.40. All common shares issued in connection with the Loan were issued pursuant to prospectus exemptions of applicable securities laws."Given current financial market conditions and hostilities in Eastern Europe, we felt it was prudent to strengthen the Company's cash position at a time when it is advantageous to be able to build product for ready delivery of expected orders," said David Luxton, Executive Chairman, who added "I, and others in the Company, are pleased to have participated in the Loan as well as exercising warrants."On March 14th, 2022, KWESST announced that concurrently with the closing of the Loan financing, the Company received Notices of Exercise from certain holders of warrants exercisable at a price of $0.20 for a total of $120,000. As a result, the total gross proceeds from the Loan financing and the exercise of warrants totals $2,120,000. In connection with the closing of the subscriptions announced today, KWESST agreed to pay a cash finder's fee to PI Financial Corp. an amount of $8,000.The securities issued in connection with the Loan are subject to a regulatory four-month and one day hold ...

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