DEFSEC TECHNOLOGIES — Capital/Financing Update 2022

Sep 22, 2022

Form 51-102F3 Material Change Report

1. Name and Address of Company

KWESST Micro Systems Inc. (“KWESST” or the “Company”) 155 Terence Matthews Crescent, Unit #1 Kanata, ON, K2M 2A8

2. Date of Material Change

September 13, 2022

3. News Release

A news release disclosing the material change was released by KWESST through NewsFile Corp. on September 13, 2022, and a copy was subsequently filed under the Corporation’s profile on SEDAR at www.sedar.com.

4. Summary of Material Change

KWESST announced that it commenced an underwritten public offering in Canada of units for gross proceeds of approximately USD$3 million (the “ Offering ”). Each unit (a “ Unit ”) is comprised of one common share in the capital of KWESST (a “ Share ”) and a common share purchase warrant (a “ Warrant ”). Each Warrant entitles its holder to purchase one additional common share for a period of five years from closing. PI Financial Corp. (“ PI Financial ”) is acting as book-runner and sole underwriter in connection with the Offering.

5. Full Description of Material Change

5.1. Full Description of Material Change

On September 13, 2022, KWESST announced the Offering.

The Offering is expected to close concurrently with the financing announced by KWESST on August 16[th] , 2022, for which ThinkEquity, a US based investment bank, will serve as sole book-running manager (the “ US Financing ”). Contingent on the closing of the US Financing, KWESST has applied to list its common shares on the Nasdaq Capital Market under the ticker symbol “KWE” and the warrants offered in the US Financing under the ticker symbol “KWESW”.

The Offering is expected to be priced in the context of the market, with the final terms of the Offering to be determined at the time of pricing. The price of the Offering will be identical to the price of the US Financing and the Warrants will be exercisable at the same price as those issued as part of the US Financing and will have the same expiry date. The shares are expected to be listed on the TSX Venture Exchange (the “ TSXV ”). The Offering will be subject to the terms of an underwriting agreement to be entered into between the Company and PI Financial. Closing of the Offering is subject to customary conditions as well as the successful completion of the US Financing and the

listing on Nasdaq Capital Market having been approved.

The Company intends to use the net proceeds from the Offering to repay certain outstanding loans and for general corporate purposes.

The Company filed a preliminary short form base PREP prospectus (the “ Preliminary Prospectus ”) in connection with the Offering. The Preliminary Prospectus was filed with the securities commissions in each of the provinces of Canada, except Québec.

The Preliminary Prospectus contains important detailed information about the Offering. The Preliminary Prospectus can be found under the Company’s profile on SEDAR at www.sedar.com. Copies of the Preliminary Prospectus may also be obtained from PI Financial by email at: syndication@pifinancial.com. Prospective investors should read the Preliminary Prospectus and the other documents the Company has filed before making an investment decision.

5.2. Disclosure for Restructuring Transactions

Not applicable

6. Reliance on subsection 7.1(2) or (3) of National Instrument 51-102

Not applicable

7. Omitted Information

Not applicable

8. Executive Officer

For further information, please contact Steve Archambault, Chief Financial Officer at (613) 319-0537 extension 116.

9. Date of Report

September 22, 2022