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United States securities and exchange commission logo





                             August 4, 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.
                                                            Draft Registration
Statement on Form F-1
                                                            Submitted July 6,
2022
                                                            CIK No. 0001889823

       Dear Mr. MacLeod:

              We have reviewed your draft 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 providing the requested
information and either submitting
       an amended draft registration statement or publicly filing your
registration statement on
       EDGAR. 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 the information you provide in response to these
comments and your
       amended draft registration statement or filed registration statement, we
may have additional
       comments.

       Draft Registration Statement on Form F-1 Submitted July 6, 2022

       Cover Page

   1.                                                   Please revise your
cover page and summary of "The Offering" on page 10 to:
                                                            disclose the
exercise limitation for holders of your Warrants;
                                                            clarify, if true,
that the exercise limitation is also applicable to the Warrants
                                                            underlying the
Pre-Funded Units;
                                                            state that the
Units and Pre-funded Units will not be listed on Nasdaq or on any
                                                            national securities
exchange; and
                                                            clarify if any
insiders or company affiliates have indicated an intention to purchase
                                                            Pre-funded Units.
 Jeffrey MacLeod
FirstName   LastNameJeffrey
KWESST Micro     Systems Inc.MacLeod
Comapany
August      NameKWESST Micro Systems Inc.
        4, 2022
August
Page  2 4, 2022 Page 2
FirstName LastName
2.       We note that you have granted the underwriter a 45-day over-allotment
option exercisable
         to purchase "up to an additional Common Shares, Pre-funded Warrants
and/or Warrants,
         in each case representing up to 15% of such securities sold in the
offering." Please
         explain the reasons for structuring the over-allotment option in the
way you disclose,
         particularly since it appears the amount of proceeds you may receive
could vary greatly
         depending on the security used to cover over-allotments. Also clarify
whether the
         underwriter will receive any commissions or discounts with respect to
over-allotment
         Warrants, in light of the expected price of $0.00001. Please reconcile
your disclosure on
         page 10 that the purchase price to be paid per additional Pre-funded
Warrant will be equal
         to the public offering price of one Pre-funded Warrant with your
disclosure on your cover
         page that the Pre-funded Warrants cannot be purchased separately in
your offering. On
         your cover page and in your prospectus, please disclose the range of
proceeds that you
         will receive if the over-allotment option is exercised entirely for
shares, on the one hand,
         or for warrants, on the other hand.
Prospectus Summary, page 3

3.       Revise to clearly explain the stage of development for each of your
products and
         solutions. With respect to any products or solutions that are
currently complete, disclose
         the sales and marketing efforts you have undertaken to date and which
products or
         solutions are in full production.
Risk Factors, page 16

4.       We note your disclosure that you "will be subject to extensive
regulation in the United
         States for our non-lethal systems." Please expand your risk factor
disclosure to
         address that you have "self-classified the .67 caliber version of the
PARA OPS devices as
         a 'destructive device,' providing us with the ability to go to market
much sooner than
         waiting for ATF classification ruling," according to your disclosure
on page 50. Please
         clarify whether this means your non-lethal devices are considered
"firearms" and whether
         you are considered a firearms manufacturer. Advise whether you plan to
self-classify
         your other non-lethal products and whether there are any material
risks associated with the
         self-classification of your devices, including if the ATF or other
authorities ultimately
         disagree with your self-classification. Additionally, please expand
your risk factor
         disclosure to further address the extensive regulation that you will
be exposed to in the
         United States to the extent your devices are classified as "firearms"
and you are a firearms
         manufacturer. Finally, please clarify which of the PARA OPS products
you disclose on
         page 39 relates to the .67 caliber version of the PARA OPS devices and
whether it is a
         reciprocating or non-reciprocating device.
You will experience immediate and substantial dilution as a result of this
offering, page 16

5.       Your risk factor discusses the impact of substantial dilution
"assuming no sale of any Pre-
         funded Units" or if the underwriter exercises its Over-Allotment
Option. Please expand
         your risk factor disclosure to discuss all potential sources of
dilution, including from
 Jeffrey MacLeod
KWESST Micro Systems Inc.
August 4, 2022
Page 3
         the exercise of any Pre-funded Warrants included in the Pre-funded
Units and from the
         exercise of Warrants.
Global inflationary pressure may have an adverse impact on our gross margins
and our business,
page 18

6.       Your disclosure indicates that inflation has caused a significant
increase in the cost of raw
         materials you source to manufacture your products and prototypes.
Please disclose the
         specific raw materials that have been or may be impacted. Please also
reconcile this risk
         factor with your disclosure on page 47 that you "are not aware of
material sourcing issues
         or pricing volatility of raw materials."
We may depend on key suppliers, page 20

7.       You disclose that you may depend on key suppliers. To the extent that
you are dependent
         on any suppliers, provide appropriate summary information about any
such commercial or
         financial contracts. File any material agreement as an exhibit, or
tell us why it is not
         required. Refer to Item 4.B.6. of Form 20-F. We also note your
disclosure in the
         subsequent risk factor that your supply chain may be impacted. To the
extent material,
         discuss how recent supply chain disruptions have impacted your
operations.
The Pre-funded Warrants are speculative in nature, page 33

8.       Please expand your risk factor to note that the Warrants are also
speculative in nature and
         clarify that there is no assurance that the market price of your
Common Shares will ever
         equal or exceed the exercise price of the Warrants and that the
Warrants may expire
         worthless. Additionally, advise if there may be an arbitrage
opportunity that could
         depress the price of your Common Shares because the Warrants included
in the Units and
         Pre-funded Units are expected to be separately listed on Nasdaq.
Capitalization and Indebtedness, page 37

9.       Revise to present the actual and as adjusted information as of March
31, 2022, consistent
         with the historical periods presented in the financial statements and
the pro forma
         information included on page 15.
Economic Dependence, page 52

10.    We note your disclosure on page F-18 that for the three and six months
ended March 31,
       2022, one customer accounted for 84.19% and 85.25% of your total
revenue. We also
       note your disclosure of a master service agreement entered in November
2021 with
       GDMS. Please revise to provide the material terms of any customer
agreements on which
FirstName LastNameJeffrey MacLeod
       you are dependent, including any milestones requirements and termination
provisions.
Comapany   NameKWESST
       Identify              Micro
                the customer(s)  andSystems
                                     file any Inc.
                                              agreement as an exhibit, or tell
us why it is not
       required.  Refer
August 4, 2022 Page 3   to Items 4.B.6.  and 19 of Form 20-F.
FirstName LastName
 Jeffrey MacLeod
FirstName   LastNameJeffrey
KWESST Micro     Systems Inc.MacLeod
Comapany
August      NameKWESST Micro Systems Inc.
        4, 2022
August
Page  4 4, 2022 Page 4
FirstName LastName
Operating and Financial Review and Prospects, page 61

11.      Please disclose any known trends or uncertainties that have had or are
reasonably likely to
         have a material impact on your cash flows, liquidity, capital
resources, cash requirements,
         financial position, or results of operations arising from, related to,
or caused by inflation.
         Trends or uncertainties may include the combined impact of inflation
and your inventory
         valuation method on cost of sales, gross profit, inventory and taxes.
12.      Please discuss whether supply chain disruptions materially affect your
outlook or business
         goals. Specify whether these challenges have materially impacted your
results of
         operations or capital resources and quantify, to the extent possible,
how your sales, profits,
         and/or liquidity have been impacted. Explain whether any mitigation
efforts introduce
         new material risks, including those related to product quality,
reliability, or regulatory
         approval of products.
13.      Please disclose any known trends or uncertainties that have had or are
reasonably likely to
         have a material impact on your cash flows, liquidity, capital
resources, cash requirements,
         financial position, or results of operations arising from, related to,
or caused by the global
         disruption from, Russia   s invasion of Ukraine.
14.      Please clarify whether your "Public safety product sales" revenue
segment includes any
         sales from your "non-lethal" product line.
Results of Operations - Three and Six Months Ended March 31, 2022, and 2021,
page 62

15.      We note in your reconciliation of Adjusted EBITDA loss you reflect
$422,931 and
         $1,350,461 as "Other adjustments." It appears that these may represent
"stock-based
         compensation" but are not reflected on the appropriate line. Please
advise or revise.
Lock-up Agreements, page 99

16.      Please disclose the exceptions to your lock-up agreements.
Material United States Federal Income Tax Considerations
Treatment of Pre-funded Warrants, page 112

17.      We note your disclosure about the tax treatment of the Pre-funded
Warrants, including
         that the Pre-funded Warrant should be treated as a separate class of
your common shares
         for U.S. federal income tax purposes and a U.S. Holder of Pre-funded
Warrants will not
         recognize gain or loss upon the exercise of a Pre-funded Warrant.
Please attribute this
         opinion to tax counsel and file a tax opinion pursuant to Item
601(b)(8) of Regulation S-K
         or advise why the tax consequences of your Pre-funded Warrants are not
material to an
         investor.
 Jeffrey MacLeod
FirstName   LastNameJeffrey
KWESST Micro     Systems Inc.MacLeod
Comapany
August      NameKWESST Micro Systems Inc.
        4, 2022
August
Page  5 4, 2022 Page 5
FirstName LastName
Exhibits

18.      We note your disclosure that you have employment agreements with your
named
         executive officers. Please file the employment agreements as exhibits
to the registration
         statement. Refer to Item 8 of Form F-1 and Item 601(b)(10) of
Regulation S-K.
19.      Please tell us whether you have any material contracts with Alare
Technologies that you
         intend to file relating to your partnership to develop your GhostNet
project.
General

20.      Please supplementally provide us with copies of all written
communications, as defined in
         Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
         present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
         not they retain copies of the communications.
        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
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