On January 18, 2021 Kwesst Micro Systems (KWE.V) announced that is has entered into a technology purchase agreement with DEFSEC Corp to acquire “proprietary non-lethal munitions technology system referred to as the low-energy cartridge technology (LEC technology)”.

KWE has a diversified product line, based on a single core technology, called Micro Integrated Sensor Systems Technology (MISST), which involves miniaturized sensors, optics, ballistics and software.

Its products include:

  • Tactical Awareness and Situational Control System
  • Drone Threat & Counter Solution
  • Tactical Laser Defeat System
  • Shot Counter
  • Electronic Decoys

DEFSEC is an Ottawa-based private company owned by David Luxton the Executive Chairman of Kwesst.

“We see the LEC Technology as having universal application across four market segments that currently use a variety of dated “non-lethal” or “less-lethal” products, each having a vast global market,” stated Jeff MacLeod, Kwesst Founder and CEO.

LEC technology applications:

  • public order (riots and control of dangerous subjects)
  • military and law enforcement training (realistic force-on-force training)
  • personal defence (home, car, boat, RV, camping, hiking)
  • high-action gaming

An overview of Kwesst’s business objectives.

“The destructive capacity of a weapon is largely relative to its muzzle energy,” explains Equity Guru’s Joseph Morton on October 26, 2020, “Muzzle energy is the kinetic energy of a bullet as its propelled from the muzzle.”

“The heavier the bullet and the faster it moves, the higher its energy and destructive potential,” added Morton, “This technology is considered non-lethal because the kinetic energy of the bullet as its expelled from the muzzle of the firearm is lower than that of a regular bullet”.

LEC technology fits snugly into Kwesst’s niche of modern military solutions.

Kwesst isn’t interested in blowing up Naval Destroyers or carpet-bombing villages. KWE’s thing is to scramble enemy communications, or shoot armed drone out of the sky.

On December 30, 2020 KWE announced that it has been granted a second U.S. patent covering KWESST’s “Phantom” electronic decoy system.

Phantom is the electronic decoy KWESST is bringing to market in 2021 in response to specific military interest in a next-generation system that is ultra-miniaturized for expedient deployment in theaters of operation by ground personnel or on Unmanned Aerial Vehicles.

Phantom mimics all relevant NATO military electronic signal emissions in order to deceive adversaries attempting to locate them based on those waveforms.

Key Electronic Decoy Features:

  • Deflects, masks friendly force Electro Magnetic (EM) signature with numerous false phantom signatures
  • Spoofs adversaries to draw them out, slow their targeting of friendly forces, and commit and waste assets on phantom targets
  • Authentic emulation of voice, video, data and text signatures of NATO forces.
  • Addresses next-generation NATO requirements.
  • Simultaneous waveform generation across all communications systems

With Joe Biden about to take office, Democrats will squabble internally about whether to slash the military budget – which currently sits at USD $750 billion per year.

“The United States, up until 1945, won virtually all the major wars that it fought,” states Vox, “The reason is those wars were overwhelmingly wars between countries.”

“But that kind of war has become the exception,” continued Vox, “If you look around the world today, about 90% of wars are civil wars. The three longest wars in US history are Vietnam, Iraq, and Afghanistan — all from recent decades, all these complex types of civil wars.”

The “civil wars” in play down south now include gangs of armed U.S. protestors, who believe Joe Biden’s presidential election win was “rigged”.

“Washington, D.C., was locked down and U.S. law enforcement officials geared up for pro-Trump marches in all 50 state capitals this weekend,” reports CBC news, “erecting barriers and deploying thousands of National Guard troops to try to prevent the kind of violent attack that rattled the nation on Jan. 6”.

“The FBI warned police agencies of possible armed protests outside all 50 state capitol buildings starting Saturday through president-elect Joe Biden’s inauguration on Wednesday, fuelled by supporters of President Donald Trump who believe his false claims of electoral fraud”.

Whatever your politics, lethally shooting civilians is never a desirable outcome. But in a country with more guns than people avoiding lethal outcomes isn’t easy.

An astonishing 44% of Americans say they personally know someone who has been shot, either accidentally or intentionally.

“The trend of fatal police shootings in the United States seems to only be increasing, with a total 999 civilians having been shot, 226 of whom were Black, in 2020,” reported Statista, “The rate of fatal police shootings among Black Americans was much higher than that for any other ethnicity, standing at 34 fatal shootings per million of the population as of December 2020”.

“In recent years, particularly since the fatal shooting of Michael Brown in Ferguson, Missouri in 2014, police brutality has become a hot button issue in the United States,” added Statista.

Jeff MacLeod and David Luxton – experts in the specialty ordnance business – will collaborate on the market development of the LEC Technology

Mr. MacLeod is a highly knowledgeable defence industry executive with over 20 years’ experience in the field of small arms and advanced soldier systems.

David Luxton was the founder in 1990 of Simunition Inc., a business that develops and sells simulated munitions for realistic close quarters combat training for military and law enforcement around the world.

He sold the business to a large military contractor and from 2015 – 2018 he was the Executive Chairman of United Tactical Systems LLC, a U.S. company that develops and sells products for the global less-lethal market.

Deal Terms:

The purchase price for the LEC Technology shall be satisfied by the issuance to DEFSEC of 1,000,000 shares of Kwesst and 500,000 share purchase warrants of Kwesst at a price of $0.70 per share.

The warrants shall vest as to 25% on the first anniversary of the closing of the LEC Technology acquisition and 25% on each of the subsequent three anniversaries of the completion of the LEC Technology acquisition.

Under the Purchase Agreement, DEFSEC shall also be entitled to a 7% royalty on annual sales of the LEC Technology, net of taxes, duties, customs brokerage fees, shipping and handling costs, customer credits, discounts and returns, up to a cumulative maximum of $10 million.

“The kind of fatalities that have led to widespread protests in the U.S. are just one example of the need for more advanced solutions that enable law enforcement to engage with more benign devices from a safer stand-off distance and ensure that everyone goes home alive,” stated Jeff MacLeod, Kwesst Founder and CEO.

  • Lukas Kane

Full Disclosure: Kwesst is an Equity Guru marketing client.

Written By:

Lukas Kane

Lukas Kane was previously the CEO of a North American investment news syndicate. He was also the Communication Director for a consortium of publicly traded companies. A Senior Writer at Equity.Guru, Mr. Kane writes about mining, cannabis, energy, technology and biotech.

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