Congress just approved a $740 billion National Defense Authorization Act (NDAA), which is now headed to President Trump. If the President does follow through with threats to veto the bill, Congress would have to vote again and need at least two-thirds of each chamber to vote in favor for it to become law, according to CBS News. According to Reuters, “The vote in the Republican-controlled Senate was 84 to 13, more than the two-thirds majority needed in the 100-member chamber needed to override a veto, a rare break between members of the president’s party in Congress and the White House. The Democratic-led House of Representatives backed the NDAA by 335 to 78 earlier this week, also more than the two-thirds majority needed.”
In addition, “In 2021, defense budgets and revenues for defense contractors are expected to remain largely stable, as military programs continue to be critical to national defense, especially when geopolitical tensions are considered,” analysts at Deloitte added. From here, with military spending likely to increase, some of the top companies to watch include KWESST Micro Systems Inc. (TSXV:KWE)(OTC:KWEMF), Draganfly Inc. (OTC:DFLYF)(CSE:DFLY), Mission Ready Solutions Inc. (TSXV:MRS)(OTC:MSNVF), Drone Delivery Canada Corp. (TSXV:FLT)(OTC:TAKOF), and Patriot One Technologies Inc. (TSX:PAT)(OTC:PTOTF).
KWESST Micro Systems Inc. (TSXV:KWE)(OTC:KWEMF) BREAKING NEWS: KWESST Micro Systems Inc. today announced it has extended until January 15, 2021 its option to acquire a proprietary non-lethal munitions technology system referred to as the Low Energy Cartridge technology. The owner of the LEC Technology is DEFSEC Corporation, an Ottawa-based based private company owned by David Luxton the Executive Chairman of KWESST. KWESST entered into a letter of intent with DEFSEC on June 6, 2020 to acquire the LEC Technology. The parties continue to cooperate and are working toward a definitive agreement.
The LEC Technology is a proprietary non-lethal cartridge based ordnance system with wide application in the rapidly growing market of soldier and law enforcement training, maintenance of public order, personal defence and high-action gaming. “The market has long required a safer, lower-cost reliable alternative to existing solutions,” said Jeff MacLeod, KWESST Founder and CEO. “We see the LEC Technology as a strong fit with KWESST’s other smart ordnance technologies, like our Shot Counter system. Together, the LEC Technology and Shot Counter have the potential to anchor the build-out of a significant business unit specialized in smart ordnance systems, with a vast global market.”
The contemplated transaction would benefit from the deep combined experience of Jeff MacLeod and David Luxton in the specialty ordnance business. Mr. MacLeod is a highly knowledgeable defence industry executive with over 20 years’ experience in the field of small arms and advanced soldier systems. Prior to establishing KWESST, he was the General Manager of Colt Canada, the primary supplier of small arms to the Canadian military. 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 was the Executive Chairman of United Tactical Systems LLC, a U.S. company that develops and sells products for the global less-lethal market.
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. 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 other terms and conditions of the letter of intent between DEFSEC and KWESST are detailed on pages 16 and 17 of the Company’s Filing Statement dated September 28, 2020 which can be found at www.sedar.com. The acquisition of the LEC technology by KWESST remains subject to the approval of the TSX Venture Exchange.
Other related developments from around the markets include:
Draganfly Inc. (OTC:DFLYF)(CSE:DFLY), an award-winning, industry-leading manufacturer and systems developer, is pleased to announce that Loop Insights Inc. has selected Draganfly’s Vital Intelligence vital sign screening technology to integrate into its Venue Bubble Platform to be used to detect potential symptoms of CV. Draganfly’s Vital Intelligence AI technology utilizes the camera on a mobile phone to screen vital signs such as Heart Rate, Respiratory Rate, and Sp02 to help screen for infectious conditions, including CV.
Mission Ready Solutions Inc. (TSXV:MRS)(OTC:MSNVF) is pleased to announce the appointment of William J. Bratton to the Board of Directors of the Company, effective immediately. During a 46-year career in law enforcement, Commissioner Bratton instituted progressive change while leading six police departments, including seven years as Chief of the Los Angeles Police Department and two nonconsecutive terms as the Police Commissioner of the City of New York. He is the only person ever to lead the police agencies of America’s two largest cities. Commissioner Bratton was the 42nd police commissioner of the City of New York from January 2014 to September 2016. It was the second time he had held the post. During that time, he oversaw 32 months of declining crime, including historic lows for murders and robberies. Commissioner Bratton spearheaded a major technological overhaul, the Mobile Digital Initiative, which gave a smartphone with custom-designed apps to every officer and put a tablet in every patrol car.
Drone Delivery Canada Corp. (TSXV:FLT)(OTC:TAKOF) is pleased to announce that, with the assistance of its sales agent Air Canada (TSX: AC), it has executed a non-binding Letter of Intent, effective December 9th, 2020, with Overseas Express Consolidators Inc. Under the terms of the LOI, the parties are cooperating to work towards a binding definitive agreement. The Agreement will set out the terms and conditions respecting the Company’s drone delivery solution using DDC’s Sparrow, Robin XL and Condor drones and the Company’s patented and proprietary FLYTE system, in a Software as a Service (SaaS) model. DDC will provide implementation & commissioning of the systems, training, technical support, ongoing managed services and remote monitoring from its Operations Control Centre in Vaughan, Ontario. Anticipated projects on which the parties are focusing are routes for: First Nations communities across Canada, Canadian ports including shore-to-ship applications, and transactional routes connecting various airports in Canada, with potential subsequent expansion to other applications. All operations will be conducted in accordance with the Canadian Aviation Regulations and Transport Canada flight authorizations.
Patriot One Technologies Inc. (TSX:PAT)(OTC:PTOTF), developer of the PATSCAN Multi-Sensor Threat Detection Platform, is pleased to announce the appointment of the Company’s new Chief Executive Officer Peter Evans to its Board of Directors, effective immediately following the quarterly board and committee meetings on Thursday, December 10, 2020. Revenue was $0.4 million for the three months ended October 31, 2020 as compared to $0.1 million for the same period ended October 31, 2019. The Company had $0.3 million of deferred revenue and $0.9 million of contracted revenue not yet recognized as revenue as of October 31, 2020, of which 100% is expected to be recognized over the next twelve months. Net loss decreased from $7.3 million in the first quarter ended October 31, 2019 to $3.3 million in the first quarter ended October 31, 2020. The decrease in loss pertains to streamlining of the Company’s business operations, CV relief funding received and transaction costs incurred for the acquisition of Xtract in the comparative period.
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