United States securities and exchange commission logo
November 9, 2022
Jeffrey MacLeod
Chief Executive Officer and Director
KWESST Micro Systems Inc.
155 Terence Matthews Crescent, Unit #1
Ottawa, Ontario, K2M 2A8
Re: KWESST Micro
Systems Inc.
Amendment No. 4 to
Registration Statement on Form F-1
Filed November 7,
2022
File No. 333-266897
Dear Jeffrey MacLeod:
We have reviewed your amended registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Amendment No. 4 to Registration Statement on Form F-1 Filed November 7,
2022
Dilution, page 98
1. Your revised disclosure
on page 98 does not indicate whether the warrants to purchase
191,673 Common Shares
are excluded or included in the calculations. Please advise or
revise.
Lock-up Agreements, page 99
2. We note that the form
of lock-up agreement filed as an exhibit to your underwriting
agreement contains
exceptions to the lock-up agreement that are not disclosed in your
prospectus. Revise your
disclosure to note each of the exceptions contained in the lock-up
agreement.
Jeffrey MacLeod
KWESST Micro Systems Inc.
November 9, 2022
Page 2
Financial Statements, page 125
3. You disclose that on October 28, 2022 a 1-for-70 reverse stock split
became effective.
Please revise the financial statements to reflect the reverse stock
split. Also, revise to
include a note which discloses the retroactive treatment and the date
the change became
effective. Refer to SAB Topic 4C and paragraph 64 of IAS 33.
Exhibits
4. Counsel opines in the legal opinion filed as Exhibit 5.1 that the
shares "will be validly
issued as fully paid and non-assessable common shares in the capital"
of the company.
Please have counsel revise its opinion to state that the shares will
be "legally (or validly)
issued; fully paid; and non-assessable." Refer to II.B.1 of Staff
Legal Bulletin No. 19 for
further guidance. We also note counsel makes certain assumptions about
due
authorization by the registrant of all requisite corporate action.
Please have counsel
clarify that it has not assumed that the registrant has taken all
corporate actions necessary
to authorize the issuance of the securities. Refer to II.B.3.a of
Staff Legal Bulletin No. 19.
5. We further note that counsel's legal opinion filed as Exhibit 5.2
opines only with respect
to the components underlying the units. Counsel must opine not solely
on the components
of the units but also the units themselves. Please provide a binding
obligation opinion
with respect to the legality of the units. Alternatively, to the
extent counsel believes the
units should be treated in a similar fashion as shares of capital
stock under applicable state
law, the opinion may provide that the units are legally issued, fully
paid and non-
assessable. Refer to Section II.B.1.h of Staff Legal Bulletin No. 19.
6. We note that the Warrant Agreement, Form of Warrant, and Form of
Pre-funded Warrant
filed as Exhibits 4.2, 4.3 and 4.4, respectively, include exclusive
forum provisions. Please
disclose in your prospectus whether these provisions apply to actions
arising under the
Securities Act or Exchange Act, including how the provisions may impact
investors and
any material risks arising therefrom, as applicable. If the provisions
apply to actions
arising under the Securities Act or Exchange Act, please state that
there is uncertainty as
FirstName LastNameJeffrey MacLeod
to whether a court would enforce such provisions. If the provisions
apply to Securities
Comapany NameKWESST
Act claims, Micro
please also stateSystems Inc. cannot waive compliance with
the federal
that investors
securities
November laws
9, 2022 and2 the rules and regulations thereunder.
Page
FirstName LastName
Jeffrey MacLeod
FirstName LastNameJeffrey
KWESST Micro Systems Inc.MacLeod
Comapany 9,
November NameKWESST
2022 Micro Systems Inc.
November
Page 3 9, 2022 Page 3
FirstName LastName
You may contact Melissa Kindelan, Senior Staff Accountant, at (202)
551-3564 or
Christine Dietz, Senior Staff Accountant, at (202) 551-3408 if you have
questions regarding
comments on the financial statements and related matters. Please contact
Patrick Faller, Staff
Attorney, at (202) 551-4438 or Jan Woo, Legal Branch Chief, at (202) 551-3453
with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of Technology
cc: Richard Raymer