Mr. David Luxton reports

KWESST PROVIDES CONTEXT ON SPECIAL SHAREHOLDER MEETING SCHEDULED ON MARCH 31 IN CONNECTION WITH A PROPOSED SHARE CONSOLIDATION

Kwesst Micro Systems Inc. has filed notice of a meeting of shareholders, a management information circular and related documents to convene a special meeting of shareholders. The meeting will take place on March 31, 2025, at 4 p.m. Eastern Time. Copies of the meeting materials are available for review under the profile for the company on SEDAR+ and on Kwesst's website.

The meeting has been convened to seek shareholder approval of a resolution, authorizing, if deemed advisable by the board of directors, the consolidation of the issued and outstanding common shares of the company on the basis of one share for a maximum of every 25 common shares issued and outstanding.

By way of background to the share consolidation, on May 16, 2024, the company received a notification letter from the Nasdaq Stock Market advising the company that it was not in compliance with Nasdaq Listing Rule 5550(a)(2), as the bid price of the company's common shares on Nasdaq had closed at less than $1.00 (U.S.) per share for 30 consecutive business days (the minimum bid price requirement). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the company was provided with 180 calendar days from the date of the notification letter, or until Nov. 12, 2024, to regain compliance with the minimum bid price requirement.

On Oct. 23, 2024, the company completed a consolidation of its issued and outstanding common shares on the basis of 10 preconsolidation shares for each one postconsolidation share. On Nov. 13, 2024, the company received a letter from Nasdaq, notifying the company that it was eligible for an additional 180-calendar-day period, or until May 12, 2025, to regain compliance with the minimum bid price requirement.

Accordingly, shareholders will be asked to approve a resolution authorizing the share consolidation in order to regain compliance with the minimum bid price requirement. In order to be adopted, the consolidation resolution must be approved by the majority of the votes cast by the holders of the common shares, either present in person or represented by proxy at the meeting.

If the consolidation resolution is not adopted by the shareholders, there may be serious, adverse effects on the company and the shareholders, notably the delisting from Nasdaq if the common shares continue to trade below the requisite $1.00 (U.S.) per share price needed to maintain the Nasdaq listing in accordance with the minimum bid price requirement. The Nasdaq does not provide any additional extension periods to regain compliance after the expiry of the first extension on May 12, 2025. Please consult the meeting materials for additional information in this regard.

The company believes that the consolidation is in the best interests of shareholders as it will allow the company to ensure continued compliance with Nasdaq's minimum bid price requirements.

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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