Mr. Sean Homuth reports

KWESST SIGNS AGREEMENT FOR DISTRIBUTION OF PARA OPS PRODUCTS IN CANADA

Kwesst Micro Systems Inc. has signed a binding letter of intent (LOI) with O'Dell Engineering Ltd., in Southwestern Ontario, Canada (ODE), for the sale and distribution of Para Ops products in Canada for the civilian market, with the parties agreeing to complete a definitive agreement by March 31, 2024.

O'Dell Engineering is a long-established distributor of sporting and law enforcement firearms and ancillary equipment across Canada. Phil O'Dell, president, commented that: "We see tremendous potential for Para Ops across the consumer and law enforcement market in Canada, where applicable regulations permit various uses of Para Ops products. The Para Ops technology is a true breakthrough in a safe alternative to things like pepper spray and bear spray, as well as starter pistols for canine retrieval trials and training that have become problematic in Canada."

Kwesst and ODELL have signed a binding letter of intent (LOI) with a definitive agreement to be concluded by March 31, 2024. The LOI contemplates purchase of a small initial stocking order of Para Ops products by ODELL upon completion of the definitive agreement.

Sean Homuth, president and chief executive officer of Kwesst, commented that: "We've had overtures from the industry of sports events as well as animal trainers who view Para Ops as a timely alternative to products like starter pistols, as well as defence against dangerous animals. We are excited about the potential to bring our unique solutions to the Canadian market and the role that Phil and his company can play given his extensive experience and distribution capacity."

The LOI also includes order consolidation and shipping of Kwesst's ARWEN product line by ODELL to improve efficiency and responsiveness to Kwesst's law enforcement customers in Canada. The terms of the LOI allow for the storage and handling of all products to be sold in Canada with a simplified formula whereby ODE stores, handles and ships inventory, and in return is entitled to a 20-per-cent discount to MSRP for products sold to ODE customers, and a 5-per-cent fee (based on invoice value) for products shipped to Kwesst's existing customers. Actual shipping and handling charges are excluded from these amounts and are billed directly to customers at cost.

"This is a very important step forward in our endeavour to simplify and scale our operations, drive synergy between our public safety products, and build upon the long-standing customer loyalty we've appreciated from our Arwen customers," said Mr. Homuth. "We continue to engage in discussions with the view of concluding similar arrangements in the United States."

About Kwesst Micro Systems Inc.

Kwesst develops and commercializes breakthrough next-generation tactical systems for military and security forces. The company's current portfolio of offerings includes digitization of tactical forces for real-time shared situational awareness and targeting information from any source (including drones) streamed directly to users' smart devices and weapons. Other Kwesst products include countermeasures against threats such as electronic detection, lasers and drones. These systems can operate stand-alone or integrate seamlessly with original equipment manufacturer products and battlefield management systems, and all come integrated with TAK. The company also has a new proprietary non-lethal product line branded Para Ops with application across all segments of the non-lethal market, including law enforcement. The company is headquartered in Ottawa, Canada, with representative offices in London, United Kingdom, and Abu Dhabi, United Arab Emirates.

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