KWESST signs exclusive agreement with AerialX Drone Solutions for counter-drone technology

KWESST Micro Systems Inc (CVE:KWE) (OTCQB:KWEMF) announced Tuesday that it has signed an amended and restated license agreement with AerialX Drone Solutions Inc for counter-drone technology. 

In October 2019, KWESST had signed a non-exclusive worldwide license with AerialX and has now gained exclusive rights to the technology for US and Canadian militaries. 

The company said the product, which is based on the licensed technology marketed under the name GreyGhost, is an autonomous soldier-portable micro drone missile system that defends against small hostile drones including swarms using high-speed kinetic impact.

READ: KWESST Micro Systems establishes ATAK Center of Excellence in Ottawa

KWESST noted that the dramatic growth of small unmanned aircraft systems (sUAS), commonly called drones, creates new threats and challenges for NATO countries including the US Department of Defense (DoD) and Canada’s Department of National Defence (DND). 

Recent technology trends have enabled state actors, non-state actors, terrorist organizations, and criminals to easily convert legitimate applications of sUAS into efficient weapons. These small drones provide NATO adversaries with a low-cost means of conducting intelligence, surveillance, and reconnaissance missions or direct attack of NATO forces.

“This is a timely development as the U.S. and other NATO military agencies have expressed interest in our GreyGhostTM counter-sUAS drone missile and view it as a serious candidate solution to the growing threat of suspicious or hostile drones,” said David Luxton, KWESST’s executive chairman, in a statement.  

“Our GreyGhost counter-sUAS drone missile has been down-selected by key agencies from among dozens of contenders for upcoming demonstrations and trials because of its unique ability to track and hunt hostile drones and neutralize them with kinetic impact.”

Pentagon takes action

KWESST CEO Jeff MacLeod pointed out that the Pentagon last year established the Army-led Joint Counter-Small Unmanned Aircraft Systems Office, or JCO, and approved a set of requirements to help counter the threat posed by small drones and formalized requirements for how technology developed by industry players can seamlessly plug into a single command-and-control system. 

“Evaluation of industry counter-drone systems are expected to be ongoing throughout 2021,” MacLeod said. “In the U.S. and in 2021 alone, DoD plans to spend at least USD $404 million on counter-UAS (c-UAS) research and development and at least $83 million on c-UAS procurement.”

KWESST said the counter-drone market has grown considerably in recent years, with both major defense contractors and small technology companies actively competing to gain market share in a market that by one estimate could be worth $5.4 billion by 2028.

Under the agreement with AerialX, KWESST said it also retains its non-exclusive worldwide rights. 

KWESST has agreed to issue AerialX 100,000 shares of KWESST in consideration of the new exclusive rights and an additional 100,000 shares of KWESST upon AerialX meeting certain technological milestones.

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