KWESST Micro Systems Inc. Files 20-F Report

TL;DR

<b>KWESST Micro Systems Inc. has filed its annual 20-F report for the fiscal year ending September 30, 2023.</b>

AI Summary

KWESST Micro Systems Inc. (DFSCW) filed a Foreign Annual Report (20-F) with the SEC on January 22, 2024. KWESST Micro Systems Inc. filed its annual 20-F report on January 22, 2024. The report covers the fiscal year ending September 30, 2023. The company's primary business is in prepackaged software (SIC 7372). KWESST Micro Systems Inc. is incorporated in A1 and headquartered in Kanata, Ontario. The filing number for this report is 001-41566.

Why It Matters

For investors and stakeholders tracking KWESST Micro Systems Inc., this filing contains several important signals. This filing provides a comprehensive overview of the company's financial performance and business operations for the past fiscal year, crucial for investors assessing its current standing. As a 20-F filing, it offers detailed information required for foreign private issuers, including financial statements and risk factors, enabling a deeper understanding of the company's market position and potential challenges.

Risk Assessment

Risk Level: — KWESST Micro Systems Inc. shows moderate risk based on this filing. The filing is a standard annual report (20-F) and does not contain immediate, significant negative news or financial distress indicators.

Analyst Insight

Review the detailed financial statements and risk factors within the 20-F filing to understand KWESST Micro Systems Inc.'s performance and outlook.

Key Numbers

• 2023-09-30 — Fiscal Year End (Report Period)
• 2024-01-22 — Filing Date (Report Submission Date)
• 001-41566 — SEC File Number (Regulatory Filing Identifier)

Key Players & Entities

• KWESST Micro Systems Inc. (company) — Company Name
• 2024-01-22 (date) — Filing Date
• 2023-09-30 (date) — Fiscal Year End
• 7372 (industry) — Standard Industrial Classification
• A1 (location) — State of Incorporation
• Kanata (location) — City
• 001-41566 (filing_number) — SEC File Number

Forward-Looking Statements

• KWESST Micro Systems Inc. will continue to utilize equity financing methods, such as private placements and warrant exercises, to raise capital in the near future. (KWESST Micro Systems Inc.) — medium confidence, target: 2025-09-30

FAQ

Industry Context

KWESST Micro Systems Inc. operates within the prepackaged software industry, identified by SIC code 7372.

Regulatory Implications

The company is filing a Form 20-F, which is an annual report required by the U.S. Securities and Exchange Commission (SEC) for foreign private issuers.

What Investors Should Do

1. Analyze the financial statements for revenue, expenses, and profitability.
2. Review the risk factors section for potential business and market challenges.
3. Examine management's discussion and analysis for insights into strategy and outlook.

Key Dates

• 2024-01-22: Filing of 20-F Report — Annual financial and business disclosure for the fiscal year ending 2023-09-30.
• 2023-09-30: Fiscal Year End — End of the reporting period covered by the 20-F filing.

Year-Over-Year Comparison

This filing is the annual 20-F report for the fiscal year ending September 30, 2023, providing updated financial and operational information compared to previous filings.

Key Financial Figures

• $1.00 — r the conversion of USD into CAD was USD$1.00 equals CAD$ 1.3522. SPECIAL NOTE REGA
• $1,235,000,000 — e had total annual gross revenues of USD$1,235,000,000 (as such amount is indexed for inflatio
• $1,000,000,000 — ious 3-year period, issued more than USD$1,000,000,000 in non-convertible debt; or (d) the dat

Filing Documents

• form20f.htm (20-F) — 4332KB
• exhibit4-9.htm (EX-4.9) — 50KB
• exhibit4-13.htm (EX-4.13) — 46KB
• exhibit4-14.htm (EX-4.14) — 48KB
• exhibit12-1.htm (EX-12.1) — 6KB
• exhibit12-2.htm (EX-12.2) — 6KB
• exhibit13-1.htm (EX-13.1) — 3KB
• exhibit13-2.htm (EX-13.2) — 3KB
• exhibit97-1.htm (EX-97.1) — 23KB
• form20fxz001.jpg (GRAPHIC) — 7KB
• form20fxz002.jpg (GRAPHIC) — 1KB
• form20fxz003.jpg (GRAPHIC) — 1KB
• form20fxz004.jpg (GRAPHIC) — 19KB
• form20fxz005.jpg (GRAPHIC) — 24KB
• form20fxz006.jpg (GRAPHIC) — 37KB
• form20fxz007.jpg (GRAPHIC) — 4KB
• form20fxz008.jpg (GRAPHIC) — 5KB
• form20fxz009.jpg (GRAPHIC) — 5KB
• form20fxz010.jpg (GRAPHIC) — 8KB
• form20fxz011.jpg (GRAPHIC) — 8KB
• form20fxz012.jpg (GRAPHIC) — 2KB
• form20fxz013.jpg (GRAPHIC) — 31KB
• form20fxz014.jpg (GRAPHIC) — 16KB
• form20fxz015.jpg (GRAPHIC) — 15KB
• form20fxz016.jpg (GRAPHIC) — 13KB
• form20fxz017.jpg (GRAPHIC) — 15KB
• form20fxz018.jpg (GRAPHIC) — 8KB
• form20fxz019.jpg (GRAPHIC) — 2KB
• 0001062993-24-001096.txt (&nbsp;) — 20199KB
• kwe-20230930.xsd (EX-101.SCH) — 229KB
• kwe-20230930_cal.xml (EX-101.CAL) — 72KB
• kwe-20230930_def.xml (EX-101.DEF) — 522KB
• kwe-20230930_lab.xml (EX-101.LAB) — 2097KB
• kwe-20230930_pre.xml (EX-101.PRE) — 814KB
• form20f_htm.xml (XML) — 3927KB

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS 7

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS 7

OFFER STATISTICS AND EXPECTED TIMETABLE 7

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 7

KEY INFORMATION 7

ITEM 3. KEY INFORMATION 7 A. Reserved 7 B. Capitalization and Indebtedness 7 C. Reasons for the Offer and Use of Proceeds 7 D. Risk Factors 7

INFORMATION ON THE COMPANY 21

ITEM 4. INFORMATION ON THE COMPANY 21 A. History and Development of the Company 21 B. Business Overview 28 C. Organizational Structure 44 D. Property, Plants and Equipment 45

UNRESOLVED STAFF COMMENTS 45

ITEM 4A. UNRESOLVED STAFF COMMENTS 45

OPERATING AND FINANCIAL REVIEW AND PROSPECTS 45

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 45 A. Operating Results 45 B. Liquidity and Capital Resources 50 C. Research and Development, Patents and Licences, etc. 55 D. Trend Information 56 E. Critical Accounting Estimates. 56

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 58

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 58 A. Directors and Senior Management 58 B. Compensation 60 C. Board Practices 70 D. Employees 73 E. Share Ownership 73

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 74

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 74 A. Major Shareholders 74 B. Related Party Transactions 74 C. Interests of Experts and Counsel 75

FINANCIAL INFORMATION 75

ITEM 8. FINANCIAL INFORMATION 75 A. Consolidated Statements and Other Financial Information 75 B. Significant Changes 76

THE OFFER AND LISTING 76

ITEM 9. THE OFFER AND LISTING 76 A. Offer and Listing Details 76 B. Plan of Distribution 76 C. Markets 76 D. Selling Shareholders 76 E. Dilution 76 F. Expenses of the Issue 76 ITEM 10. ADDITIONAL INFORMATION 76 A. Share Capital 76 B. Memorandum and Articles of Association 76 C. Material Contracts 78 D. Exchange Controls 80 E. Taxation 81 F. Dividends and Paying Agents 86 G. H. Documents on Display 86 I. Subsidiary Information 86 J. Annual Report to Security Holders 86

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 86

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 86 ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 86

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 86 ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES 86 ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS 86

CONTROLS AND PROCEDURES 87

ITEM 15. CONTROLS AND PROCEDURES 87 A. Disclosure Controls and Procedures 87 B. Management's Annual Report on Internal Control Over Financial Reporting 87 C. Attestation Report of Registered Public Accounting Firm 88 D. Changes in Internal Controls Over Financial Reporting 88

AUDIT COMMITTEE FINANCIAL EXPERT 89

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT 89 ITEM 16B. CODE OF ETHICS 89 ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES 89

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES 90

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES 90 ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS 90 ITEM 16F. CHANGE IN COMPANY'S CERTIFYING ACCOUNTANT 90 ITEM 16G. CORPORATE GOVERNANCE 90 ITEM 16H. MINE SAFETY DISCLOSURE 90 ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 90 ITEM 17.

FINANCIAL STATEMENTS 90

FINANCIAL STATEMENTS 90

FINANCIAL STATEMENTS 91

ITEM 18. FINANCIAL STATEMENTS 91 ITEM 19. EXHIBITS 91 3 INTRODUCTION In this Annual Report on Form 20-F (the " Annual Report "), " KWESST ," " Company ," " we ," " us " and " our " refer to KWESST Micro Systems Inc. and its consolidated subsidiaries. Information contained in this Annual Report is given as of September 30, 2023, the fiscal year end of Company, unless otherwise specifically stated. Market and industry data used throughout this Annual Report was obtained from various publicly available sources. Although the Company believes that these independent sources are generally reliable, the accuracy and completeness of such information are not guaranteed and have not been verified due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and the limitations and uncertainty inherent in any statistical survey of market size, conditions and prospects. Unless otherwise indicated, all references in this Annual Report to " dollars " or " CAD " or " $ " are to Canadian dollars and all references to " USD " or " USD$ " are to United States dollars. The following table sets forth the rate of exchange for the Canadian dollar, expressed in United States dollars in effect at various times. Canadian Dollars to U.S. Dollars Year Ended September 30, 2023 Year Ended September 30, 2022 High for period 0.7617 0.8111 Low for period 0.7217 0.7285 Average rate for period 0.7416 0.7832 Rate at end of period 0.7396 0.7296 The daily average exchange rate on January 17, 2024 as reported by the Bank of Canada for the conversion of USD into CAD was

Forward-looking statements relating to us include, among other things, statements relating to

Forward-looking statements relating to us include, among other things, statements relating to: our expectations regarding our business, financial condition and results of operations; the future state of the legislative and regulatory regimes, both domestic and foreign, in which we conduct business and may conduct business in the future; our expansion into domestic and international markets; our ability to attract customers and clients; our marketing and business plans and short-term objectives; our ability to obtain and retain the licenses and personnel we require to undertake our business; our ability to deliver under contracts with customers; anticipated revenue from professional service contracts with customers; our strategic relationships with third parties; our anticipated trends and challenges in the markets in which we operate; governance of us as a public company; and expectations regarding future developments of products and our ability to bring these products to market. 4 Forward-looking statements are based upon a number of assumptions and are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the following risk factors: limited operating history; failure to realize growth strategy; failure to complete transactions or realize anticipated benefits; reliance on key personnel; regulatory compliance; competition; changes in laws, regulations and guidelines; demand for our products; fluctuating prices of raw materials; pricing for products; ability to supply sufficient product; potential cancellation or loss of customer contracts if we are unable to meet contract performance requirements; expansion to other jurisdictions; damage to our reputation; operating risk and insurance coverage; negative opera

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS Not applicable.

OFFER STATISTICS AND EXPECTED TIMETABLE

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE Not applicable.

KEY INFORMATION

ITEM 3. KEY INFORMATION A. Reserved. B. Capitalization and Indebtedness Not applicable. C. Reasons for the Offer and Use of Proceeds Not applicable. D. Risk Factors The Company's operations and financial performance are subject to the normal risks of its industry and are subject to various factors which are beyond the control of the Company. Certain of these risk factors are described below. The risks described below are not the only ones facing the Company. Additional risks not currently known to the Company, or that it currently considers immaterial, may also adversely impact the Company's business, operations, financial results or prospects, should any such other events occur. Risks Relating to Our Business We are an early-stage company. We are an early-stage company and as such, we are subject to many risks including under-capitalization, cash shortages, and limitations with respect to personnel, financial and other resources and the lack of revenue. There is no assurance that we will be successful in achieving a return on shareholders' investment and the likelihood of success must be considered in light of our early stage of operations. Our prospects must be considered speculative in light of the risks, expenses, and difficulties frequently encountered by companies in their early stages of operations, particularly in the highly competitive and rapidly evolving markets in which we operate. To attempt to address these risks, we must, among other things, successfully implement our business plan, marketing, and commercialization strategies, respond to competitive developments, and attract, retain, and motivate qualified personnel. A substantial risk is involved in investing in us because, as a smaller commercial enterprise that has fewer resources than an established company, our management may be more likely to make mistakes, and we may be more vulnerable operationally and financially to any mistakes that may be made, as well as to external fac

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View this 20-F filing on SEC EDGAR