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OTTAWA, Ontario - KWESST Micro Systems Inc. (TSXV: KWE) (NASDAQ: KWE), a developer of next-generation tactical systems with a current market capitalization of $2.45 million, announced it will consolidate its common shares on a 21-to-1 basis, effective Tuesday, in an effort to comply with Nasdaq’s minimum bid price requirement. The company’s shares, which have declined 68% year-to-date according to InvestingPro data, will begin trading on the TSX Venture Exchange and the Nasdaq Capital Market on a consolidated basis around the same day.
This move follows shareholder approval at a special meeting on March 31, 2025, where a consolidation ratio of up to 25-to-1 was sanctioned. The final ratio and timing were determined by KWESST’s Board of Directors on April 2, 2025. Currently, the company has 11,137,638 issued and outstanding shares, which will be reduced to approximately 530,363 post-consolidation shares, subject to rounding adjustments. InvestingPro analysis reveals the company maintains a healthy current ratio of 2.57, indicating strong short-term liquidity despite recent market challenges. Subscribers can access 13 additional ProTips and comprehensive financial metrics.
Shareholders holding fractional shares as a result of the consolidation will see their holdings rounded up or down to the nearest whole number, depending on whether the fraction is at least half of a share or less, respectively. The company’s name and trading symbols will remain unchanged, and the new CUSIP and ISIN numbers for the post-consolidation shares will be 501506802 and CA5015068029.
Registered shareholders will receive a letter of transmittal from TSX Trust Company with instructions on exchanging their pre-consolidation share certificates for new ones. Shareholders with shares in brokerage accounts do not need to take any action for the exchange.
The consolidation will not affect the number of outstanding share purchase warrants, but will adjust the number of shares issuable upon exercise and the exercise price accordingly. The exercise price for the Listed Warrants will be adjusted to US$1,050.00 per post-consolidation share, and twenty-one Listed Warrants will be required to purchase one post-consolidation share.
KWESST’s decision for the share consolidation is intended to ensure that the company remains in compliance with the Nasdaq’s continued listing standards. This strategic step is seen by the company as being in the best interests of its shareholders. While the stock is currently trading at $0.22, InvestingPro’s Fair Value analysis suggests the stock may be undervalued, though investors should note the company’s rapid cash burn rate and recent market volatility.
The information provided in this article is based on a press release statement from KWESST Micro Systems Inc.
In other recent news, KWESST Micro Systems Inc. has announced a strategic partnership with Nordon Inc., a contract manufacturer in the United States. This collaboration aims to expand KWESST’s manufacturing capabilities into the U.S. market, focusing on the production of its ARWEN™ less-lethal universal 40mm baton projectile and PARA OPS™ cartridges and projectiles. The partnership is formalized under a non-binding memorandum of understanding, with plans to finalize a manufacturing agreement by June 1, 2025. Nordon, a HUBZone-certified manufacturer, has already completed tooling for most components of the PARA OPS™ products, which could enhance KWESST’s U.S. presence. This move is expected to address logistic challenges and regulatory compliance barriers, facilitating smoother market access for KWESST’s public safety solutions. According to Sean Homuth, President and CEO of KWESST, the partnership will improve product availability and streamline logistics for U.S. law enforcement and civilian markets. Paul Reed, CEO of Nordon Inc., highlighted the partnership’s potential to support domestic job creation and economic growth. KWESST also emphasized its commitment to maintaining and expanding its manufacturing footprint in Canada for products destined for the Canadian market.
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