KWESST Micro Systems (KWE) Announces 1:21 Reverse Share Split

KWESST Micro Systems Inc. (NASDAQ: KWE) (NASDAQ: KWESW) ("KWESST" or the "Company") announces, subject to the final approval of the TSX Venture Exchange (the "TSXV"), that it will effect a consolidation of the Company' issued and outstanding common shares (each, a "Share") on the basis of twenty-one (21) pre-consolidation Shares for each one (1) post-consolidation Share (the "Consolidation"). The Consolidation will be effective at 12:01 a.m. Eastern Daylight Time April 23, 2025. The Shares are expected to begin trading on the TSXV and Nasdaq Capital Market (the "Nasdaq") on a consolidated basis on or around April 23, 2025.

The Company's shareholders previously approved the Consolidation at a special meeting of shareholders held on March 31, 2025 up to a ratio of twenty five (25) pre-consolidation Shares for each one (1) post-consolidation Share, such ratio and the implementation and timing of such Consolidation to be determined by the Company's Board of Directors (the "Board") at its discretion. The Consolidation was effected pursuant to a resolution of the Board dated April 2, 2025.

As at the date hereof, there are a total of 11,137,638 Shares issued and outstanding. Assuming no other change to the issued and outstanding Shares, a total of 530,363 Shares, subject to adjustments for rounding, will be issued and outstanding.

No fractional post-Consolidation Shares will be issued as a result of the Consolidation. Fractional Shares will be rounded up to the next nearest whole number of Shares if the fraction is at least half of a Share and rounded down to the nearest whole number of Shares if the fraction is less than half a Share.

The principal purpose of the Consolidation is to increase the bid price of the Shares to regain compliance with the continued listing requirements of the Nasdaq Capital Market. The Company's name and trading symbol will remain unchanged following the Consolidation. The new CUSIP number will be 501506802 and the new ISIN number will be CA5015068029 for the post-Consolidation Shares.

A letter of transmittal from the Company's transfer agent, TSX Trust Company, has been sent to registered shareholders and is available on the Company's SEDAR+ profile at www.sedarplus.ca. The letter of transmittal contains instructions on how registered shareholders can exchange their Share certificates representing pre-Consolidation Shares for new certificates representing post-Consolidation Shares. Until surrendered, each Share certificate representing pre-Consolidation Shares will represent the number of whole post-Consolidation Shares to which the holder is entitled as a result of the Consolidation. Shareholders who hold their Shares in brokerage accounts are not required to take action to effect an exchange of their pre-Consolidation Shares for post-Consolidation Shares.

The Consolidation will not have any effect on the number of issued and outstanding Share purchase warrants of the Company which trade on the TSX-V under the symbol "KWE.WT.U" or on Nasdaq under the symbol "KWESW" (collectively, the "Listed Warrants"). However, as a result of the Consolidation, the number of Shares issuable upon the exercise of each Listed Warrant will be reduced and the exercise price increased, the whole in accordance with the terms of the indenture and warrant agent agreement, as applicable, governing the Listed Warrants. Following the Consolidation, the exercise of twenty-one (21) Listed Warrants will be required to purchase one (1) post-Consolidation Share, and the exercise price will be US$1,050.00 per Share. No fractional Share will be issued upon exercise of any Listed Warrants. The Listed Warrants will continue to trade on the TSX-V and Nasdaq, as applicable, in each case, under their existing CUSIP number.

The exercise price and number of Shares of the Company issuable upon exercise of any other outstanding convertible securities will be proportionately adjusted pursuant to the Consolidation.

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.

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