KWESST Micro Systems Inc. develops and commercializes next-generation technology solutions that deliver a tactical advantage for military, public safety agencies and personal defense markets. Our core mission is to protect and save lives. We focus on three niche market segments as follows: NON-LETHAL DIGITIZATION COUNTER-THREAT Products for consumer and Real-time situational awareness Protection against lasers electronic professional markets. and targeting. detection and hostile drones. Non-Lethal Our goal is to provide professionals and consumers with reliable and safer, non-lethal alternatives to the use of firearms. Our products are designed to offer our customers effective solutions for personal, family and community protection that do not require the use of lethal force, and are intended for both the consumer and security professional markets. In the consumer market, our products are designed to provide civilians who face potential threats from would-be assailants with an effective, non-lethal tool to deter would-be assailants and to escape harm's way. In the professional market, our products are designed to provide domestic and international law enforcement agencies, corrections and custodial officers, private security professionals, private investigators and other professional security users with a reliable, non-lethal option to address threats and resolve conflicts without the need to resort to lethal force. Our non-lethal product suite includes the following: . PARA OPS, our innovative, patent-pending cartridge-based firing platform system, intended to provide more reliable non-lethal choices (single-shot and multi-shot) for consumers and law enforcement agencies; and . A line of projectiles that are fired by PARA OPS devices, including solid slug (kinetic), inert color powder, and irritant pepper powder. . ARWEN less-lethal launchers and ammunition for law enforcement agencies, used primarily for riot control and police tactical teams during high-risk arrests against potentially armed or violent persons. ARWEN products have been in the marketplace for over 30 years. The stage of development for our non-lethal product suite is as follows: . PARA OPS: We have finalized the development of our single-shot PARA OPS device and we are currently in the low-rate initial production ("LRIP") to provide samples to potential customers and strategic partners. We expect to finalize our sales, marketing and distribution plan and begin the commercialization phase during our first quarter ending December 31, 2022 of fiscal year 2023 (i.e., October 1, 2022 to September 30, 2023) ("Fiscal 2023"). by initially targeting law enforcement agencies in which we are currently selling the ARWEN product line. We are in the prototype phase for the multi-shot PARA OPS device, which we expect to complete and begin LRIP during Q1 Fiscal 2023. . ARWEN: Both our ARWEN ACE (single-shot launcher) and ARWEN 37 (multi-shot launcher) are in full production, along with the related ammunition. Our current sales and marketing efforts are primarily through tradeshows in the United States and Canada, pro bono training and direct sales to our existing law enforcement agency customers. Digitization We offer proprietary next-generation real-time situational awareness solutions for both the military and civilian markets. In the military market, our signature proprietary product, Tactical and Situational Control System ("TASCS"), offers an app that networks soldiers on the ground with each other through their smart devices so they can receive and share situational awareness information from any source including drones. Further, we extend the TASCS app to "Joint Fires" applications (Joint Fires is a common terminology used in military for fires produced during the employment of forces from two or more components in a coordinated action toward a common objective) on indirect fire weapons like mortars, grenade launchers, heavy machine guns, rocket launchers, artillery and more. Effectively, we convert these "dumb" legacy weapon systems to "smart" precision weapon systems without any modification to the weapon or ammunition. After successfully developing digital technologies for tactical military applications which provide real-time exchange of situational awareness, navigation, imagery, and operational information for soldiers on the ground, we became aware of opportunities to apply these digitization solutions to the public safety market. These solutions solve critical challenges for law enforcement, fire, emergency response, search and rescue, and natural disaster management, all of whom require networked situational awareness to understand, decide, and act faster and more effectively in response to a critical incident. When responders are facing a public emergency, they need information quickly. Whether it is a wildfire, active shooter scenario or a natural disaster, they need to know what they are walking into and where their resources are located. They also need to communicate and collaborate in real-time - across teams and information sources and often across departments. We entered the civilian public safety market by launching our Critical Incident Management System ("CIMS") for enhanced public safety. Our CIMS solution integrates emergency operations, incident command post, incident commanders, and all responders whether mobile or dismounted. Our CIMS architecture is a native cloud-based Microsoft environment (MS Azure) integrated with the Team Awareness Kit ("TAK"). This provides key stakeholders with seamless fusion and sharing of crucial real-time position location, imagery, and time-sensitive emergency services data and information for effective and coordinated delivery of emergency services, including rescue, fire suppression, emergency medical care, law enforcement, and other forms of hazard control and mitigation. The stage of development for our digitization products and services is as follows: . TASCS Indirect Fire Modules System ("TASCS IFM"): We have completed the development for TASCS IFM for the 81mm mortar system and have conducted extensive user testing with the United States military in the past year. We are also marketing this product to the Canadian forces and expect to conduct trials over the next twelve months. At this time, we do not expect further development unless funded by the military customer. We will proceed to production only upon receiving a customer order. . CIMS: Leveraging from our TAK integration experience with military customers, we are currently offering CIMS services to the public safety market. In July 2022, we won our first contract with CounterCrisis Technology Inc. to co-implement a national Ground Search and Rescue Incident Command System for Public Safety Canada, with the Ontario Provincial Police as technical advisory stakeholder for this project. Sales and marketing efforts for our digitization products is primarily through tradeshows and direct sales to military and public safety markets. Counter-Threat We offer proprietary next-generation counter-threat solutions to protect against hostile enemy lasers, electronic detection and drones. Our patented Phantom product is a miniaturized electronic warfare device with the ability to emulate the electronic communications of North Atlantic Treaty Organization ("NATO") countries to spoof adversaries as to the location of NATO forces. Due to its small size, it can be easily deployed by soldiers at the tactical level or by drones in an area of operation, or mounted on light tactical vehicles. Our Battlefield Laser Detection System ("BLDS") product suite specifically addresses a current NATO need to protect against laser threats: lasers used to "paint" or "lase" ground personnel to target them for attack, or weaponized lasers intended to cause direct injury to personnel from a high-energy laser beam itself. With our latest product under development, referred to as GhostNet, we believe it will provide an effective solution to counter-measure against hostile drones including loitering munitions that can hover for hours waiting for a designed target. Military and Homeland Security agencies are seeking additional options of stopping drones kinetically but without collateral damage. The stage of development for our counter-threat product suite is as follows: . BLDS: We have completed the operational prototype development of our vehicle and squad laser detection product suite. We are currently conducting sensitivity and environmental testing in preparation for customer orders at which stage we will then move the operational prototypes to production. . Phantom: We have completed the development of Phantom Electromagnetic Spectrum Operations ("EMSO") operational prototypes. We have tested, and are currently undergoing testing, EMSO with the United States military. This may lead to further development to be funded by the military customer, upon receiving their specific requirements. We will proceed to production only upon receiving a customer order. . GhostNet: We are currently in the concept and designing phase. Sales and marketing efforts for our counter-threat products are primarily through tradeshows and direct sales to military. We are a corporation domiciled in Canada and were incorporated under the Business Corporations Act (British Columbia) (the "BCBCA") on November 28, 2017. Our registered and head office is located at 2900 - 550 Burrard Street, Vancouver, British Columbia V6C 0A3 and our principal place of business is located at 155 Terence Matthews Crescent, Unit #1, Ottawa, Ontario, Canada.