Mr. Jason Frame reports
KWESST RESPONDS TO OTC MARKETS REQUEST ON RECENT PROMOTIONAL ACTIVITY
Kwesst Micro Systems Inc. has been requested by OTC Markets Group Inc. to issue this statement about promotional activity concerning its common stock.
On April 6, 2021, OTC Markets informed the company that it became aware of certain promotional activities concerning the company and its common stock traded on the OTCQB marketplace, including the distribution of two promotional newsletter e-mails published by Epic Stocks Picks discussing the company, its products, and the global size of the defence and security business sector. The publications also contained a summary of recent news release issued by Kwesst. OTC Markets provided examples of the promotional material for reference. The company was aware of the articles before receiving them from OTC Markets.
Epic Stock Picks is a third party marketing and advertising firm retained by the company's investor relations firm Emerging Markets LLC (EMC) to provide content distribution and advertising services. Each of the newsletters presented factual statements regarding the company, its business and industry. The company provided EMC publicly available source information for the newsletters and did have editorial control over the materials, including reviewing the materials for factual accuracy prior to their dissemination. The company does not believe the statements in the newsletters were false or misleading. The appointment of EMC and the nature of the relationship between Kwesst and EMC, as well as the compensation to be paid to EMC, were publicly disclosed on March 3, 2021, and the news release announcing the appointment can be found on SEDAR and on the company's website. Neither EMC, nor any of its principals currently own any securities, directly or indirectly, of the company or have any intention to acquire any securities of the company.
Further, the company understands this promotional activity may have coincided with increased trading activity in the company's common shares beginning on April 6, 2021. The company does not believe the promotional activities were a factor in the recent increase in trading volume in the company's common shares. Instead, the company attributes the increase to a news release issued by Kwesst on that day, which investors can find on SEDAR and on the company's website.
In the last 12 months, the company has worked with EMC, Equity Guru, Maximus Strategic Consulting, Stockhouse, Investor News Network, Proactive Investors, Digitonic Ltd., Agora Internet Relations Corp. and Hybrid Financial Ltd. to provide investor relations, public relations services, marketing or other related services. The company also has Jason Frame and Scott Young providing investor relations work to Kwesst in their personal capacity.
After an inquiry by management, none of the company's executive officers, directors, or, to the knowledge of the company, any controlling shareholders and third party service providers, except as outlined herein, sold or purchased shares of the company within the past 90 days. Within the past 90 days, Mr. Frame bought and sold shares in the context of the market, and 2573685 Ontario Inc., a company controlled by the president and chief executive officer of Kwesst, sold 184,956 common shares in a private transaction and made all required securities filings in connection with such trade.
The OTC Markets has further requested that the company state whether it has issued any shares or convertible instruments, allowing conversion to equity securities at prices constituting a discount to the current market rate at the time of the issuance. The company represents, as disclosed in its public filings on SEDAR, that since listing on the TSX Venture Exchange on Sept. 22, 2020, it has not issued common shares at a discount to the market price at the time of the offering. On April 6, 2021, Kwesst issued a news release announcing its intent to complete a best effort, brokered private placement of up to two million units of the company at a price of $1.25 per unit for gross proceeds of up to $2.5-million. Investors can find the news release on SEDAR and on the company's website.
For more complete and specific information regarding the company, its prospects and the risks associated with those prospects, readers should consult the company's public filings on SEDAR, its website and other reliable sources. The company encourages investors to contact their investment advisers prior to making any investment.
About Kwesst Micro Systems Inc.
Kwesst develops and commercializes high-value ultraminiaturized technology applications that make a critical difference to the safety and operational effectiveness of personnel in the defence and security industries. The company's current portfolio of unique proprietary offerings includes: its signature TASCS (tactical awareness and situational control system) for real-time awareness and targeting information from any source (including drones) streamed directly to users' smart devices and weapons; the autonomous GreyGhost soldier-portable microdrone missile system that defends against small hostile drones, including swarms, using high-speed kinetic impact; a ground laser defence system to counter the emerging threat of weaponized lasers against personnel; and the Phantom electronic battlefield decoy system to mask the electromagnetic signature of friendly forces with decoy signatures at false locations to deceive and confuse adversaries. All systems can operate stand-alone or integrate seamlessly with OEM (original equipment manufacturer) products and battlefield management systems, including Frontline, Edge, Killswitch and ATAK (Android tactical assault kit) among others. Kwesst also has developmental smart ordnance projects, including its Shot Counter system, which records the number and type of rounds fired, for optimized firearms maintenance and performance. The company is headquartered in Ottawa, Canada, with representative offices in Washington, D.C., London, United Kingdom, and Abu Dhabi, United Arab Emirates. Kwesst trades on the TSX Venture Exchange under the symbol KWE and on the U.S. OTCQB under the symbol KWEMF.
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