DFSC

Revenue from digitization services on Government programs up 121% from Q3 Fiscal 2025, with total revenue up 92% over the same period; Gross margin $ increase of 126%, with improvement in gross margin to 33.1% from 28.2% in Q3 Fiscal 2025; Strong cash and AR position of +$5.8 million; and Test and Evaluation of BLISS™ completed with U.S. Army Vehicle Program and invitation to an additional invitation-only U.S. Army-Hosted Evaluation for a separate program. OTTAWA, ON, Aug. 13, 2026 /CNW/ -- DEFSEC Technologies Inc. (TSXV: DFSC) (TSXV: DFSC.WT.U) (NASDAQ: DFSC) (NASDAQ: DFSCW) ("DEFSEC" or the "Company") is pleased to announce the highlights of its Fiscal 2026 third quarter ("Q3 Fiscal 2026") results. This announcement is a summary only and should be read in conjunction with DEFSEC's unaudited condensed consolidated interim financial statements for the three and nine months ended June 30, 2026 and 2025 and related management's discussion and analysis for the three and nine months ended June 30, 2026, all of which have been filed on SEDAR+ and EDGAR. All figures are stated in Canadian Dollars unless otherwise noted. Strong continued growth in defence software business "The continued growth this quarter in our defence software business is further evidence of our commitment to growing a predictable, long-term stable base of revenue and margin from strategically important military programs," said Sean Homuth, President and CEO. Additional launch milestones achieved The Company has achieved significant milestones with its product roadmap during Q3. On May 6, 2026, the Company commercially released DEFSEC Lightning™ 2.0, its cloud-hosted, TAK-enabled real-time situational awareness SaaS platform for Critical Incident Management, with one Canadian police agency having subscribed ahead of full release. On May 13, 2026, the Company commercially released its ARWEN® 40mm baton ammunition, now in full-rate production, for use with third-party 40mm launchers. "Achieving these product commercialization milestones marks an important step in catalyzing further revenue growth and diversification in the public safety market," said Mr. Homuth. Q3 Fiscal 2026 Financial Highlights: Three months ended June 30, As at U.S Army testing of BLISS™ The Company announces the completion of test and evaluation of its networked BLISS™ at a United States Army test center, where the systems were tested in support of a U.S. Army vehicle program. The completed testing follows the Company's shipment of two new networked BLISS™ systems to the US Army test center, announced on April 29, 2026. Building on this milestone, the Company further announced that it has been invited by a U.S. Army program office to participate in a U.S. Army-hosted sensor test and evaluation scheduled to take place in late August 2026 at another U.S. Army test range. The invitation reflects the performance of BLISS™ in testing to date and provides DEFSEC with a significant opportunity to demonstrate the system's capabilities in an operationally relevant environment before U.S. Army program stakeholders. The patent-pending BLISS™ system alerts operators to laser activity across the battlespace, providing critical early warning and valuable seconds to assess, evade, defend, and deploy countermeasures. Miniaturized BLISS™ sensors can be mounted on vehicles and fixed infrastructure, or worn on personnel, to affordably blanket a battlespace with sensors for enhanced survivability, situational awareness and battlespace intelligence in contested environments. Beyond real-time detection, BLISS™ incorporates enhanced laser pulse signature capture and analysis to help identify the source, intent, and affiliation of detected emissions, transforming laser warning into shared, actionable battlespace information. "The completion of US Army testing and this latest invitation to demonstrate BLISS™ at an additional U.S. Army-hosted event is strong validation of our technology roadmap for battlespace laser detection and intelligence," said Mr. Homuth. "This event puts BLISS™ in front of the operators and decision-makers who will shape future requirements, and it is a meaningful step toward fielding this capability to protect soldiers and high-value assets in the battlespace. With multiple U.S. Army programs testing and evaluating the BLISS™, we see validation that this product solves a problem that matters to warfighters." About DEFSEC DEFSEC (TSXV: DFSC) (TSXV: DFSC.WT.U) (NASDAQ: DFSC) (NASDAQ: DFSCSW) (FSE: 62UA) develops and commercializes breakthrough next-generation tactical systems for military and security forces. The Company's current portfolio of offerings includes digitization of tactical forces for real-time shared situational awareness and targeting information from any source (including drones) streamed directly to users' smart devices and weapons. Other DEFSEC products include countermeasures against threats such as electronic detection, lasers and drones. These systems can operate stand-alone or integrate seamlessly with OEM products and battlefield management systems, and all come integrated with TAK. The Company also has a new proprietary less-lethal product line branded PARA SHOT™ with applications across all segments of the less-lethal market, including law enforcement. The Company is headquartered in Ottawa, Canada. For more information, please visit https://www.defsectec.com Forward-Looking Statements This news release contains "forward-looking statements" and "forward-looking information" within the meaning of Canadian and United States securities laws (collectively, "forward-looking statements"), which may be identified by the use of terms and phrases such as "may", "would", "should", "could", "expect", "intend", "estimate", "anticipate", "plan", "foresee", "have sight of", "believe", or "continue", the description of "optimism", "momentum" or "interest", the negative of these terms and similar terminology, including references to assumptions, although not all forward-looking statements contain these terms and phrases. Forward-looking statements are provided for the purpose of assisting the reader in understanding us, our business, operations, prospects and risks at a point in time in the context of historical and possible future developments and therefore the reader is cautioned that such information may not be appropriate for other purposes. Such forward-looking statements are based on the current expectations of DEFSEC's management and are based on assumptions and subject to risks and uncertainties that are documented in detail in the Company's public filings. Forward-looking statements included in this include, but are not limited to: management's belief of sufficiency of available financial resources to support forecasted activities in 2026 based on cash on hand, anticipated revenue streams and planned expenditures in the fiscal year, subject to execution of the Company's operating plan and other risks and factors described in its public filings; interest in DEFSEC Lightning™ 2.0 or other products and services as well as timing of full implementation, subscription uptake or commercial release thereof; the Company's estimates of program billings on an annualized go-forward basis and increases to annualized gross margin on a go-forward basis and extent thereof, if any; the outcome and timing of test and evaluation activities for BLISS™ at the United States Army Yuma Test Center and whether such activities result in follow-on orders; the ability to sustain full-rate production of, and demand for, ARWEN® 40mm baton ammunition; the stage of scaled production for the PARA SHOT™ technology into new training cartridges and timing of release thereof; the intended use of net proceeds from the June 2026 registered direct offering and concurrent private placement and whether any warrants are exercised; and management's belief that its extensive customer base of law enforcement agencies for ARWEN® throughout North America is a ready market for its new products like PARA SHOT™ as well as DEFSEC Lightning™. Although DEFSEC's management believes that the assumptions underlying such forward-looking statements are reasonable, they may prove to be incorrect. The forward-looking statements discussed in this news release may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting DEFSEC, including DEFSEC's inability to execute on its current operating plan and/or fiscal 2026 forecasted activities, DEFSEC's inability to secure contracts and subcontracts (on the timelines, size and scale expected or at all), statements of work and orders for its products in fiscal 2026 and onwards for reasons beyond its control, the renewal or extension of agreements beyond their original term, the granting of patents applied for by DEFSEC, inability to finance the scale up to full commercial production levels for its physical products, inability to secure key partnership agreements to facilitate the outsourcing and logistics for its ARWEN® and PARA SHOT™ products, inability to commercialize DEFSEC's Battlespace Laser Identification Sensor System (BLISS™), inability to secure or complete the execution of government contracts, inability to drive growth in DEFSEC's ARWEN® product line, inability to advance the commercialization of DEFSEC's PARA SHOT™ products, delay or inability to grow subscriptions for DEFSEC's Lightning™ 2.0 SaaS offering, lower than expected or delayed demand for DEFSEC's BLISS™, overall interest in DEFSEC's products being lower than anticipated or expected; general economic and stock market conditions; a stagnation or decrease in North American defence and public safety spending, adverse industry events; future legislative and regulatory developments in Canada, the United States and elsewhere, including changes to the continued listing requirements of the Nasdaq Capital Market and the TSX Venture Exchange; the inability of DEFSEC to implement and execute its business strategies; the Company's ability to raise additional capital when required and on acceptable terms; risks and uncertainties detailed from time to time in DEFSEC's filings with the Canadian Security Administrators and the United States Securities and Exchange Commission, and many other factors beyond the control of DEFSEC. Although DEFSEC has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and DEFSEC undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Neither the TSX Venture Exchange nor its respective Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release. Non-IFRS Measures This news release makes reference to certain non-IFRS measures. These measures are not recognized measures under the International Financial Reporting Standards ("IFRS"), do not have a standardized meaning prescribed by IFRS, and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. The non-IFRS measures used in this news release include "program billings on an annualized go-forward basis" and "Adjusted EBITDA", which are unaudited, non-IFRS measures. "Program billings on an annualized go-forward basis", refers to programmatic revenue based on the roles staffed for a full year at the program billing rate. Management believes program billings on annualized go-forward basis is a useful measure because it reflects management's estimate of annualized revenues based on current contractual taskings as of the date of this release. The most directly comparable financial measure that is disclosed in the financial statements of the Company to which the non-IFRS measure relates is revenue. "Adjusted EBITDA" refers to the sum of revenue, cost of goods sold, general and administrative expense, sales and marketing expense, and research and development expense as determined by management. Adjusted EBITDA is provided to assist readers in determining the ability of the Company to generate cash from operations and to cover financial charges. Management believes that Adjusted EBITDA provides useful information to investors as it is an important indicator of an issuer's ability to generate liquidity through cash flow from operating activities and equity accounted investees. Adjusted EBITDA is also used by investors and analysts for assessing financial performance and for the purpose of valuing an issuer, including calculating financial and leverage ratios. The most directly comparable financial measure that is disclosed in the financial statements of the Company to which the non-IFRS measure relates is operating loss. These non-IFRS financial measures reflect an additional way of viewing aspects of the Company's operations that, when viewed with IFRS results and the reconciliations to the corresponding IFRS financial measures, may provide a more complete understanding of factors and trends affecting the Company's business. Because non-IFRS financial measures exclude the effect of items that will increase or decrease the Company's reported results of operations, management strongly encourages investors to review the Company's consolidated financial statements and publicly filed reports in their entirety under the Company's profile on EDGAR and SEDAR+. 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Fiscal 2026 Results and Achievement of Significant Product Milestones Revenue on Government programs up 81% from Q2 Fiscal 2025, with total revenue up 68% over the period; Gross margin % up 19% over Fiscal 2025; Defense program billings on an annualized go-forward basis reach approximately $9.41 million; Commercial launch of ARWENﾮ 40mm baton ammunition; First shipment of PARA SHOTTM system to Public Safety customer; and Strong cash and AR position of +$5 million. OTTAWA, ON, May 13, 2026 /CNW/ - DEFSEC Technologies Inc. (TSXV: DFSC) and (TSXV: DFSC.WT.U); (NASDAQ: DFSC) and (NASDAQ: DFSCW) ("DEFSEC" or the "Company") is pleased to announce the highlights of its Fiscal 2026 second quarter ("Q2 Fiscal 2026") results. This announcement is a summary only and should be read in conjunction with DEFSEC's unaudited condensed consolidated interim financial statements for the three and six months ended March 31, 2026 and 2025 and related management's discussion and analysis for the three and six months ended March 31, 2026, all of which have been filed on SEDAR+ and EDGAR. All figures are stated in Canadian Dollars unless otherwise noted. Growth in defence software business In the second quarter of Fiscal 2026 revenue from subcontract task orders increased 81% as compared to the second quarter of Fiscal 2025. This revenue relates to the Company's software services for the Canadian Department of National Defence under two foundational long-term program subcontracts: (i) Directorate Land Command Systems Program Management Software Engineering Facility ("DSEF"); and (ii) Land Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance ("Land C4ISR") program, for the digital modernisation of the Canadian Forces. While these programs are "as and when requested" task-based contracts with no minimum guaranteed values, the Company's workshare for these multi-year contracts, excluding renewal options, would provide for up to $75 million in combined revenue through the initial contract periods that run through 2028 for DSEF and 2029 for Land C4ISR. Q2 Fiscal 2026 included the first two months of the previously announced work scope expansion on the DSEF program, which resulted in the addition of 14 new roles at the beginning of February. At the end of Q2 Fiscal 2026, the Company had 43 resources working across the Land C4ISR and DSEF programs, an increase from 19 at the end of Q2 Fiscal 2025. Subsequent to the end of the quarter, two additional resources were added to the programs resulting in program billings on an annualized go-forward basis of approximately $9.41 million. "We are pleased with the continued growth in program billings and the milestones achieved in Q2 in bringing our new products to market," said Mr. Homuth, President and CEO of DEFSEC. "We expect continued momentum in revenue growth as we ramp up further on these very strategic programs, consistent with Canada's renewed focus on sovereign defence spending and investment." Product launch milestones achieved As of the date of this press release, the Company has achieved significant milestones with its product roadmap, which includes the Company's first sale of its PARA SHOTTM ammunition, the delivery of its BLISSTM prototype to customers for qualification and trials and the commercial release of its DEFSEC LightningTM SaaS product for Critical Incident Management Systems. "Achieving these product commercialization milestones is a significant step towards further revenue growth and diversification," said Mr. Homuth. Q2 Fiscal 2026 Financial Highlights: Commercial Launch of ARWENﾮ 40mm ammunition The Company is pleased to announce continued growth in its ARWENﾮ less-lethal product line with the adoption of the ARWENﾮ 37 platform by a new law enforcement customer in the Western United States for use by its tactical team. In addition, this U.S. law enforcement customer has ordered DEFSEC's recently released ARWENﾮ 40mm baton ammunition, now in full-rate production, for use with their existing installed base of third-party 40mm launchers. Due to its significant size, the 40mm segment of the less-lethal market represents a significant opportunity for meaningful expansion of the ARWENﾮ business. This latest customer adoption further validates DEFSEC's ARWENﾮ growth strategy and reflects the competitive advantage of the ARWENﾮ system, driven by its demonstrated performance, reliability, and mission-focused design. Stock Option Grant The Company has granted an aggregate of 151,552 stock options to directors and officers, certain senior managers and consultants pursuant to its Amended and Restated Long-Term Performance Incentive Plan approved by its shareholders on February 19, 2026. The options vest one half immediately and one half on the first anniversary of granting and are exercisable at a price per share equal to the market price as at the close of trading today on the TSXV ($6.75), for a period of three years from the date of grant. The options and their terms are subject to the approval of the TSX Venture Exchange. The maximum number of Shares issuable under the option plan pursuant to the Amended and Restated Long-Term Performance Incentive Plan shall not exceed 10% of the Company's issued and outstanding shares at the date of any Stock Option Grant (199,362 at present), and in addition the maximum number of Shares issuable in respect of Deferred Share Units, Restricted Share Units, Performance Share Units and Stock Appreciation Rights shall not exceed 199,362 at any point in time. About DEFSEC DEFSEC (TSXV: DFSC) (TSXV: DFSC.WT.U) (NASDAQ: DFSC) (NASDAQ: DFSCSW) (FSE: 62UA) develops and commercializes breakthrough next-generation tactical systems for military and security forces. The Company's current portfolio of offerings includes digitization of tactical forces for real-time shared situational awareness and targeting information from any source (including drones) streamed directly to users' smart devices and weapons. Other DEFSEC products include countermeasures against threats such as electronic detection, lasers and drones. These systems can operate stand-alone or integrate seamlessly with OEM products and battlefield management systems, and all come integrated with TAK. The Company also has a new proprietary less-lethal product line branded PARA SHOTTM with applications across all segments of the less-lethal market, including law enforcement. The Company is headquartered in Ottawa, Canada. For more information, please visit https://www.defsectec.com. Forward-Looking Statements This news release contains "forward-looking statements" and "forward-looking information" within the meaning of Canadian and United States securities laws (collectively, "forward-looking statements"), which may be identified by the use of terms and phrases such as "may", "would", "should", "could", "expect", "intend", "estimate", "anticipate", "plan", "foresee", "have sight of", "believe", or "continue", the description of "optimism", "momentum" or "interest", the negative of these terms and similar terminology, including references to assumptions, although not all forward-looking statements contain these terms and phrases. Forward-looking statements are provided for the purpose of assisting the reader in understanding us, our business, operations, prospects and risks at a point in time in the context of historical and possible future developments and therefore the reader is cautioned that such information may not be appropriate for other purposes. Such forward-looking statements are based on the current expectations of DEFSEC's management and are based on assumptions and subject to risks and uncertainties that are documented in detail in the Company's public filings. Forward-looking statements included in this include, but are not limited to: management's belief of sufficiency of available financial resources to support forecasted activities in 2026 based on cash on hand, anticipated revenue streams and planned expenditures in the fiscal year, subject to execution of the Company's operating plan and other risks and factors described in its public filings; interest in DEFSEC LightningTM or other products and services as well as timing of full implementation or commercial release thereof; the Company's estimates of increases to annualized gross margin on a go-forward basis and extent thereof, if any; the stage of scaled production for the PARA SHOTTM technology into new training cartridges and timing of release thereof; and management's belief that its extensive customer base of law enforcement agencies for ARWENﾮ throughout North America is a ready market for its new products like PARA SHOTTM as well as DEFSEC LightningTM. Although DEFSEC's management believes that the assumptions underlying such forward-looking statements are reasonable, they may prove to be incorrect. The forward-looking statements discussed in this news release may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting DEFSEC, including DEFSEC's inability to execute on its current operating plan and/or fiscal 2026 forecasted activities, DEFSEC's inability to secure contracts and subcontracts (on the timelines, size and scale expected or at all), statements of work and orders for its products in fiscal 2026 and onwards for reasons beyond its control, the renewal or extension of agreements beyond their original term, the granting of patents applied for by DEFSEC, inability to finance the scale up to full commercial production levels for its physical products, inability to secure key partnership agreements to facilitate the outsourcing and logistics for its ARWENﾮ and PARA SHOTTM products, inability to commercialize DEFSEC's Battlespace Laser Identification Sensor System (BLISSTM), inability to secure or complete the execution of government contracts, inability to drive growth in DEFSEC's ARWENﾮ product line, inability to advance the commercialization of DEFSEC's PARA SHOTTM products, delay or inability to launch DEFSEC's Lightning SaaS offering, lower than expected or delayed demand for DEFSEC's BLISSTM, overall interest in DEFSEC's products being lower than anticipated or expected; general economic and stock market conditions; a stagnation or decrease in North American defence and public safety spending, adverse industry events; future legislative and regulatory developments in Canada, the United States and elsewhere; the inability of DEFSEC to implement and execute its business strategies; risks and uncertainties detailed from time to time in DEFSEC's filings with the Canadian Security Administrators and the United States Securities and Exchange Commission, and many other factors beyond the control of DEFSEC. Although DEFSEC has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and DEFSEC undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Neither the TSX Venture Exchange nor its respective Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release. Non-IFRS Measures This news release makes reference to certain non-IFRS measures. These measures are not recognized measures under the International Financial Reporting Standards ("IFRS"), do not have a standardized meaning prescribed by IFRS, and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. The non-IFRS measures used in this news release include "program billings on an annualized go-forward basis" and "Adjusted EBITDA", which are unaudited, non-IFRS measures. "Program billings on an annualized go-forward basis", refers to programmatic revenue based on the roles staffed for a full year at the program billing rate. Management believes program billings on annualized go-forward basis is a useful measure because it reflects management's estimate of annualized revenues based on current contractual taskings as of the date of this release. The most directly comparable financial measure that is disclosed in the financial statements of the Company to which the non-IFRS measure relates is revenue. "Adjusted EBITDA" refers to the sum of revenue, cost of goods sold, general and administrative expense, sales and marketing expense, and research and development expense as determined by management. Adjusted EBITDA is provided to assist readers in determining the ability of the Company to generate cash from operations and to cover financial charges. Management believes that Adjusted EBITDA provides useful information to investors as it is an important indicator of an issuer's ability to generate liquidity through cash flow from operating activities and equity accounted investees. Adjusted EBITDA is also used by investors and analysts for assessing financial performance and for the purpose of valuing an issuer, including calculating financial and leverage ratios. The most directly comparable financial measure that is disclosed in the financial statements of the Company to which the non-IFRS measure relates is operating loss. These non-IFRS financial measures reflect an additional way of viewing aspects of the Company's operations that, when viewed with IFRS results and the reconciliations to the corresponding IFRS financial measures, may provide a more complete understanding of factors and trends affecting the Company's business. Because non-IFRS financial measures exclude the effect of items that will increase or decrease the Company's reported results of operations, management strongly encourages investors to review the Company's consolidated financial statements and publicly filed reports in their entirety under the Company's profile on EDGAR and SEDAR+. 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Revenue up 47% over Q1 Fiscal 2025, with continuing momentum post quarter-end; Annualized program billings on go-forward basis reaches approximately $9.01 million in February 2026 with additional near term growth to approximately $9.92 million; First Lightning SaaS subscription received. Ottawa, Ontario--(Newsfile Corp. - February 12, 2026) - DEFSEC Technologies Inc. (TSXV: DFSC) (TSXV: DFSC.WT.U) (NASDAQ: DFSC) (NASDAQ: DFSCSW) (FSE: 62UA) ("DEFSEC" or the "Company") is pleased to announce the highlights of its fiscal 2026 first quarter ("Q1 Fiscal 2026") results. This announcement is a summary only and should be read in conjunction with DEFSEC's unaudited condensed consolidated interim financial statements for the three months ended December 31, 2025 and 2024 and related management's discussion and analysis for the three months ended December 31, 2025, all of which have been filed on SEDAR+ and EDGAR. All figures are stated in Canadian Dollars unless otherwise noted. Q1 Fiscal 2026 Financial Highlights: Growth in defence software business Much of the revenue growth in Q1 Fiscal 2026 was driven by increases in sub-contract task orders for the Company's software services for the Canadian Department of National Defence under two foundational long-term program contracts: (i) Directorate Land Command Systems Program Management Software Engineering Facility ("DSEF"); and (ii) Land Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance ("Land C4ISR") program, for the digital modernisation of the Canadian Forces. While these programs are "as and when requested" task-based contracts with no minimum guaranteed values, the Company's workshare for these multi-year contracts, excluding renewal options, would provide for up to $75 million in combined revenue through the initial contract periods that run through 2028 for DSEF and 2029 for Land C4ISR. The Company has now commenced work on the expanded work scope related to the DSEF program, originally announced on December 5, 2025, which resulted in 14 additional resources, which were staffed by subcontracted personnel. The Company now has 42 resources working across the Land C4ISR and DSEF programs resulting in program billings on an annualized go-forward basis of approximately $9.03 million with the Company currently recruiting for an additional five roles which will further increase program billings on an annualized go-forward basis to approximately $9.94 million. Further taskings in the upcoming months may be forthcoming. "We are pleased with the continued momentum in program billings and are optimistic that we will see ongoing growth beyond currently forecasted levels," said Mr. Homuth, President and CEO of DEFSEC. "Future quarterly results will reflect the escalation in program billings we are seeing in February." First Lightning SaaS subscription The Company previously announced in December 2025 that it had sold its first subscription to its DEFSEC LightningTM SaaS product with additional orders expected. Potential law enforcement customers are in various stages of evaluation of the product. "The ongoing interest in and receipt of a first order for the DEFSEC LightningTM platform validates that we are solving a very important problem for law enforcement and first responders with our SaaS solution. Further, it underscores our advantage from having done this type of development for military applications," stated Mr. Homuth. "It also underscores the deep value associated with the trust and relationships we have built with law enforcement agencies across North America through direct sales of our ARWENﾮ public order products." Select highlights during and after the quarter On December 18, 2025, the Company closed a registered direct offering to sell 566,040 Common Shares at a purchase price of $3.64 (US$2.65) per Common Share. In a concurrent private placement, the Company issued warrants to purchase up to 566,040 Common Shares at an exercise price of $4.27 per share that are immediately exercisable upon issuance and will expire five years following the date of issuance. On January 23, 2026, the Company announced that it appointed Niel Marotta as a member of the Board. On February 2, 2026, the Company announced that it appointed Elisabeth Preston as Senior Vice-President and Chief Legal Officer. The Company will hold its Annual and Special Meeting of Shareholders in virtual format on February 19, 2026 at 3:00 p.m. For further information, please contact: Jennifer Welsh, Chief Financial Officer and Chief Compliance Officer [email protected] Sean Homuth, President and Chief Executive Officer [email protected] Jason Frame, Investor Relations +1 (587) 225-2599 [email protected] About DEFSEC DEFSEC (TSXV: DFSC) (TSXV: DFSC.WT.U) (NASDAQ: DFSC) (NASDAQ: DFSCSW) (FSE: 62UA) develops and commercializes breakthrough next-generation tactical systems for military and security forces. The company's current portfolio of offerings includes digitization of tactical forces for real-time shared situational awareness and targeting information from any source (including drones) streamed directly to users' smart devices and weapons. Other DEFSEC products include countermeasures against threats such as electronic detection, lasers and drones. These systems can operate stand-alone or integrate seamlessly with OEM products and battlefield management systems, and all come integrated with TAK. The company also has a new proprietary non-lethal product line branded PARA SHOTTM with applications across all segments of the non-lethal market, including law enforcement. The Company is headquartered in Ottawa, Canada. For more information, please visit https://www.defsectec.com. Forward-Looking Statements This news release contains "forward-looking statements" and "forward-looking information" within the meaning of Canadian and United States securities laws (collectively, "forward-looking statements"), which may be identified by the use of terms and phrases such as "may", "would", "should", "could", "expect", "intend", "estimate", "anticipate", "plan", "foresee", "have sight of", "believe", or "continue", the description of "optimism", " momentum" or "interest", the negative of these terms and similar terminology, including references to assumptions, although not all forward-looking statements contain these terms and phrases. Forward-looking statements are provided for the purpose of assisting the reader in understanding us, our business, operations, prospects and risks at a point in time in the context of historical and possible future developments and therefore the reader is cautioned that such information may not be appropriate for other purposes. Such forward-looking statements are based on the current expectations of DEFSEC's management and are based on assumptions and subject to risks and uncertainties that are documented in detail in the Company's public filings. Forward-looking statements included in this include, but are not limited to: management's belief of sufficiency of available financial resources to support forecasted activities in 2026 based on cash on hand, anticipated revenue streams and planned expenditures in the fiscal year, subject to execution of the Company's operating plan and other risks and factors described in its public filings; interest in DEFSEC LightningTM or other products and services as well as timing of full implementation or commercial release thereof; the Company's estimates of increases to annualized gross margin on a go-forward basis and extent thereof, if any; the stage of scaled production for the PARA SHOTTM technology into new training cartridges and timing of release thereof; and management's belief that its extensive customer base of law enforcement agencies for ARWEN throughout North America is a ready market for its new products like PARA SHOTTM as well as DEFSEC LightningTM. Although DEFSEC's management believes that the assumptions underlying such forward-looking statements are reasonable, they may prove to be incorrect. The forward-looking statements discussed in this news release may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting DEFSEC, including DEFSEC's inability to execute on its current operating plan and/or fiscal 2026 forecasted activities, DEFSEC's inability to secure contracts and subcontracts (on the timelines, size and scale expected or at all), statements of work and orders for its products in fiscal 2026 and onwards for reasons beyond its control, the renewal or extension of agreements beyond their original term, the granting of patents applied for by DEFSEC, inability to finance the scale up to full commercial production levels for its physical products, inability to secure key partnership agreements to facilitate the outsourcing and logistics for its ARWENﾮ and PARA SHOTTM products, inability to commercialize DEFSEC's next generation Battlefield Laser Detection System, inability to secure or complete the execution of government contracts, inability to drive growth in DEFSEC's ARWENﾮ product line, inability to advance the commercialization of DEFSEC's PARA SHOTTM products, delay or inability to launch DEFSEC's Lightning SaaS offering, lower than expected or delayed demand for DEFSEC's BLDS, overall interest in DEFSEC's products being lower than anticipated or expected; general economic and stock market conditions; a stagnation or decrease in North American defense and public safety spending, adverse industry events; future legislative and regulatory developments in Canada, the United States and elsewhere; the inability of DEFSEC to implement and execute its business strategies; risks and uncertainties detailed from time to time in DEFSEC's filings with the Canadian Security Administrators and the United States Securities and Exchange Commission, and many other factors beyond the control of DEFSEC. Although DEFSEC has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and DEFSEC undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Neither the TSX Venture Exchange nor its respective Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release. Non-IFRS Measures This news release makes reference to certain non-IFRS measures. These measures are not recognized measures under the International Financial Reporting Standards ("IFRS"), do not have a standardized meaning prescribed by IFRS, and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. The non-IFRS measures used in this news release. includes "annualized gross margin contribution" and "program billings on annualized go-forward basis", which are unaudited, non-IFRS measures. "Annualized gross margin contribution", refers to gross margin dollars based on the staff and other related costs for the entire year at the program billing rate. Management believes annualized gross margin contribution is a useful measure because it aligns with annualized revenue and billings. The most directly comparable financial measure that is disclosed in the financial statements of the Company to which this non-IFRS measure relates is gross margin. "Program billings on annualized go-forward basis", refers to programmatic revenue based on the roles staffed for a full year at the program billing rate. Management believes program billings on annualized go-forward basis is a useful measure because it reflects management's estimate of annualized revenues based on current contractual taskings as of the date of this release. The most directly comparable financial measure that is disclosed in the financial statements of the Company to which the non-IFRS measure relates is revenue. These non-IFRS financial measures reflect an additional way of viewing aspects of the Company's operations that, when viewed with IFRS results and the reconciliations to the corresponding IFRS financial measures, may provide a more complete understanding of factors and trends affecting the Company's business. Because non-IFRS financial measures exclude the effect of items that will increase or decrease the Company's reported results of operations, management strongly encourages investors to review the Company's consolidated financial statements and publicly filed reports in their entirety under the Company's profile on EDGAR and SEDAR+. 1 Unaudited, non-IFRS measure. See "Non-IFRS Measures" in this news release. 2 Unaudited, non-IFRS measure. See "Non-IFRS Measures" in this news release. 3 Unaudited, non-IFRS measure. See "Non-IFRS Measures" in this news release. 4 Unaudited, non-IFRS measure. See "Non-IFRS Measures" in this news release. To view the source version of this press release, please visit https://www.newsfilecorp.com/release/283784

Revenue up 229% over fiscal 2024, from $1.5 million to $4.9 million, with continuing momentum post year-end; Expected program billings on an annualized go-forward basis for Government programs of $8.8 million as of February, 2026 with continued growth; Strong financial position to execute operational plan through calendar 2026; First DEFSEC LightningTM SaaS order received. Ottawa, Ontario--(Newsfile Corp. - December 29, 2025) - DEFSEC Technologies Inc. (TSXV: DFSC) (TSXV: DFSC.WT.U) (NASDAQ: DFSC) (NASDAQ: DFSCW) ("DEFSEC" or the "Company") is pleased to announce the highlights of its financial year ended September 30, 2025 ("FY2025") results and the outlook for fiscal 2026. This announcement is a summary only and should be read in conjunction with DEFSEC's audited consolidated financial statements for the years ended September 30, 2025, 2024 and 2023, management's discussion and analysis for the year ended September 30, 2025, and Form 20-F Annual Report for the year ended September 30, 2025, all of which have been filed on the Company's SEDAR+ and EDGAR profiles, respectively. All figures are stated in Canadian Dollars unless otherwise noted. "Fiscal 2025 was a break-out year for Company revenue growth and progress towards improved cash flow and profitability," said Sean Homuth, DEFSEC President and CEO. "Management currently believes it has a reasonable basis to support calendar 2026 forecasted activities based on cash on hand, anticipated revenue streams and planned expenditures in the fiscal year, subject to execution of the Company's operating plan and other factors described in its public filings." The Company also reported that subsequent to year-end it received its first order for the DEFSEC LightningTM real-time situational awareness system offered as a hosted Software as a Service ("SaaS") for first responders. Mr. Homuth added, "The strong interest in DEFSEC LightningTM is very promising as we plan the full commercial release for early in 2026." Much of the revenue growth in FY2025 was driven by increases in task orders for the Company's software services for the Canadian Department of National Defence under two foundational long-term program contracts: (i) Directorate Land Command Systems Program Management Software Engineering Facility ("DSEF"); and (ii) land command, control, communications, computers, intelligence, surveillance and reconnaissance ("Land C4ISR"), for the digital modernisation of the Canadian Forces. These multi-year contracts, with renewal options, currently provide for up to $75 million in programmatic services revenue through the initial contract period that run through 2028 and 2029, respectively. Beginning in February 2026, the Company's program billings on an annualized go-forward basis is expected to grow to approximately $8.81 million with 41 anticipated roles staffed across both programs by February 2026. This represents a substantial increase in momentum in revenue growth. The Company estimates annualized gross margin on a go-forward basis as of February 2026 for programmatic work to increase to approximately $2.62 million. In FY2025, the Company also received and delivered an order for evaluation of prototypes of its Battlefield Laser Detection System ("BLDS") for a major North American armoured vehicle program. "We are now actively engaged in discussions with large Canadian-based Defence primes who have approached us to explore partnering to incorporate BLDS into their Canadian offerings and programs," said Mr. Homuth. The Company's less-lethal ARWEN products also increased revenue and margin contribution to the business in FY2025, with revenue almost doubling from $0.5 million to $0.9 million. "Besides the growing revenue momentum in the ARWEN business, it also created an opportunity in FY2025 to incorporate our PARA SHOTTM technology into a new training cartridge in response to customer demand from many of our ARWEN customers," said Mr. Homuth. "This has now been developed and is in the final stages of preparation for scaled production." Management believes that its extensive customer base of law enforcement agencies for ARWEN throughout North America is a ready market for its new products like PARA SHOTTM as well as DEFSEC LightningTM. Full Year 2025 Financial Highlights: DEFSEC's digitization revenue in FY2025 was $4.0 million, a 289% increase over fiscal 2024 ("FY2024"). Total revenue increased 229% over FY2024 to $4.9 million. Gross margin was $1.7 million, or 35.2% of total revenue, in FY2025, compared to $0.5 million, or 32.3% of total revenue, in FY2024. Operating loss was $9.1 million in FY2025 as compared to a loss of $9.8 million in FY2024. Total cash and cash equivalents were $6.7 million as at September 30, 2025 compared to $0.3 million as at September 30, 2024. Major Highlights - Financings On August 7, 2025, the Company announced the closing of a public offering of 759,879 common shares in the capital of the Company (each, a "Common Share") (or pre-funded warrants in lieu thereof), together with Common Share purchase warrants (each, a "Warrant") to purchase up to 759,879 Common Shares at a combined public offering price of $8.955 per Common Share (or pre-funded warrant in lieu thereof) and Warrant, for gross proceeds to the Company of approximately $6.8 million, before deducting placement agent fees and other offering expenses payable by the Company. The Warrants have an exercise price of $10.52 per Common Share, are exercisable upon issuance and expire on August 7, 2030. H.C. Wainwright & Co. acted as the exclusive placement agent for the offering. The Common Shares and Warrants were offered pursuant to a registration statement on Form F-1 (File No. 333-288827), which was declared effective by the U.S. Securities and Exchange Commission (the "SEC") on July 23, 2025. On December 17, 2025, the Company entered into definitive agreements for the purchase and sale of 566,040 Common Shares at a purchase price of $3.64 (US$2.65) per Common Share in a registered direct offering. In a concurrent private placement, on December 18, 2025, the Company issued unregistered Common Share purchase warrants to purchase up to 566,040 Common Shares at an exercise price of $4.27 per Common Share that are immediately exercisable upon issuance and expire on December 18, 2030. For further information, please contact: Jennifer Welsh, Chief Financial Officer and Chief Compliance Officer [email protected] Sean Homuth, President and Chief Executive Officer [email protected] Jason Frame, Investor Relations +1 (587) 225-2599 [email protected] About DEFSEC DEFSEC (TSXV: DFSC) (TSXV: DFSC.WT.U) (NASDAQ: DFSC) (NASDAQ: DFSCSW) (FSE: 62UA) develops and commercializes breakthrough next-generation tactical systems for military and security forces. The company's current portfolio of offerings includes digitization of tactical forces for real-time shared situational awareness and targeting information from any source (including drones) streamed directly to users' smart devices and weapons. Other DEFSEC products include countermeasures against threats such as electronic detection, lasers and drones. These systems can operate stand-alone or integrate seamlessly with OEM products and battlefield management systems, and all come integrated with TAK. The company also has a new proprietary non-lethal product line branded PARA SHOTTM with applications across all segments of the non-lethal market, including law enforcement. The Company is headquartered in Ottawa, Canada, with a representative office in London, UK. For more information, please visit https://www.defsectec.com Forward-Looking Statements This news release contains "forward-looking statements" and "forward-looking information" within the meaning of Canadian and United States securities laws (collectively, "forward-looking statements"), which may be identified by the use of terms and phrases such as "may", "would", "should", "could", "expect", "intend", "estimate", "anticipate", "plan", "foresee", "believe", or "continue", the negative of these terms and similar terminology, including references to assumptions, although not all forward-looking statements contain these terms and phrases. Forward-looking statements are provided for the purpose of assisting the reader in understanding us, our business, operations, prospects and risks at a point in time in the context of historical and possible future developments and therefore the reader is cautioned that such information may not be appropriate for other purposes. Such forward-looking statements are based on the current expectations of DEFSEC's management and are based on assumptions and subject to risks and uncertainties. Forward-looking statements included in this include, but are not limited to: management's belief of sufficiency of available financial resources to support forecasted activities in 2026 based on cash on hand, anticipated revenue streams and planned expenditures in the fiscal year, subject to execution of the Company's operating plan and other factors described in its public filings; interest in DEFSEC LightningTM as well as timing of full commercial release thereof; the Company's estimates of increases to annualized gross margin on a go-forward basis as of February 2026 and extent thereof, if any; the stage of scaled production for the PARA SHOTTM technology into new training cartridges and timing of release thereof; and management's belief that its extensive customer base of law enforcement agencies for ARWEN throughout North America is a ready market for its new products like PARA SHOTTM as well as DEFSEC LightningTM. Although DEFSEC's management believes that the assumptions underlying such forward-looking statements are reasonable, they may prove to be incorrect. The forward-looking statements discussed in this news release may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting DEFSEC, including DEFSEC's inability to execute on its current operating plan and/or fiscal 2026 forecasted activities, DEFSEC's inability to secure contracts and subcontracts (on the timelines, size and scale expected or at all), statements of work and orders for its products in fiscal 2026 and onwards for reasons beyond its control, the renewal or extension of agreements beyond their original term, the granting of patents applied for by DEFSEC, inability to finance the scale up to full commercial production levels for its physical products, inability to secure key partnership agreements to facilitate the outsourcing and logistics for its ARWENﾮ and PARA SHOTTM products, inability to commercialize DEFSEC's next generation Battlefield Laser Detection System, inability to secure or complete the execution of government contracts, inability to drive growth in DEFSEC's ARWENﾮ product line, inability to advance the commercialization of DEFSEC's PARA SHOTTM products, delay or inability to launch DEFSEC's Lightning SaaS offering, lower than expected or delayed demand for DEFSEC's BLDS, overall interest in DEFSEC's products being lower than anticipated or expected; general economic and stock market conditions; a stagnation or decrease in North American defense and public safety spending, adverse industry events; future legislative and regulatory developments in Canada, the United States and elsewhere; the inability of DEFSEC to implement and execute its business strategies; risks and uncertainties detailed from time to time in DEFSEC's filings with the Canadian Security Administrators and the United States Securities and Exchange Commission, and many other factors beyond the control of DEFSEC. Although DEFSEC has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and DEFSEC undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Neither the TSX Venture Exchange nor its respective Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release. Non-IFRS Measures This news release makes reference to certain non-IFRS measures. These measures are not recognized measures under the International Financial Reporting Standards ("IFRS"), do not have a standardized meaning prescribed by IFRS, and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. The non-IFRS measures used in this news release. includes "annualized gross margin contribution" and "program billings on annualized go-forward basis", which are unaudited, non-IFRS measures. "Annualized gross margin contribution", refers to gross margin dollars based on the staff and other related costs for the entire year at the program billing rate. Management believes annualized gross margin contribution is a useful measure because it aligns with annualized revenue and billings. The most directly comparable financial measure that is disclosed in the financial statements of the Company to which this non-IFRS measure relates is gross margin. "Program billings on annualized go-forward basis", refers to programmatic revenue based on the roles staffed for a full year at the program billing rate. Management believes program billings on annualized go-forward basis is a useful measure because it reflects management's estimate of annualized revenues based on current contractual taskings as of the date of this release. The most directly comparable financial measure that is disclosed in the financial statements of the Company to which the non-IFRS measure relates is revenue. These non-IFRS financial measures reflect an additional way of viewing aspects of the Company's operations that, when viewed with IFRS results and the reconciliations to the corresponding IFRS financial measures, may provide a more complete understanding of factors and trends affecting the Company's business. Because non-IFRS financial measures exclude the effect of items that will increase or decrease the Company's reported results of operations, management strongly encourages investors to review the Company's consolidated financial statements and publicly filed reports in their entirety under the Company's profile on EDGAR and SEDAR+. 1 Unaudited, non-IFRS measure. See "Non-IFRS Measures" in this news release. 2 Unaudited, non-IFRS measure. See "Non-IFRS Measures" in this news release. To view the source version of this press release, please visit https://www.newsfilecorp.com/release/279178

Revenue growth: +278% Year-over-year +330% Q3 2025 over Q3 2024 Gross margin growth: +388% Year-over-year +879% Q3 2025 over Q3 2024 Accelerated backlog delivery and reduced lead-time for the ARWEN® line of business Cash balance increases by $2.3 million over Fiscal 2024 year end (excluding subsequently completed public offering with $6.8 million in gross proceeds) Ottawa, Ontario--(Newsfile Corp. - August 13, 2025) - DEFSEC Technologies Inc. (TSXV: DFSC) (TSXV: DFSC.WT.U) (NASDAQ: DFSC) (NASDAQ: DFSCW) ("DEFSEC" or the "Company") is pleased to announce the highlights of its fiscal 2025 third quarter ("Q3 Fiscal 2025") results. This announcement is a summary only and should be read in conjunction with DEFSEC's unaudited condensed consolidated interim financial statements for the three and nine months ended June 30, 2025 and 2024 and related management's discussion and analysis of financial condition and results of operations for the three and nine months ended June 30, 2025, all of which have been filed on SEDAR+ and EDGAR. All figures presented in this release are in Canadian dollars, unless otherwise noted. "Q3 2025 marked a transformative period for DEFSEC as we advanced our strategic objectives across several key focus areas," said Sean Homuth, President and CEO. "We are successfully commercializing the next generation of our Battlefield Laser Detection System, driving robust growth through the execution of government defense programs, significant growth in our ARWEN® product line and advancing the commercialization of our PARA SHOTTM products through a revitalized supply chain and manufacturing partner network." Highlights for the Period: DEFSEC's commitment to execution of our strategy, our strong focus on revenue, cash management and capital allocation, and the beginning of DEFSEC's pivot from development stage to revenue ramp-up is evidenced by the following key metrics for the period: Revenue for Q3 Fiscal 2025 increased by 330% over Q3 Fiscal 2024 (+278% on a YTD basis), driven by the DSEF ("Directorate Land Command Systems Program Management Software Engineering Facility") & Land C4ISR ("Land Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance") government contracts, and growth in our ARWEN® business; and In Q3 Fiscal 2025, the gross margin was $0.4 million, an increase of 879% over Q3 Fiscal 2024 (+388% on a YTD basis), driven primarily by the increase in revenue. Summary of Operating and Financial Results 1 See "Non-IFRS Measures" below Operating Expenses Revenue Total revenue increased by $1.1 million and $2.6 million for the three- and nine-month periods ended June 30, 2025, respectively, over the comparable prior year period. The increase is mainly due to an additional $0.8 million and $2.2 million, respectively, generated from the digitization business line and $0.3 million and $0.4 million, respectively, of additional ARWEN® sales. The increase is due to the significant ramp-up on the Land C4ISR contract in fiscal 2025 as well as accelerated deliveries on the ARWEN® product line due to reduced supply chain lead-times. Gross Margin Gross margin percentage increased from 12.4% in Q3 Fiscal 2024 to 28.2% in Q3 Fiscal 2025 mainly due to the continued ramp-up and established margins being achieved from the digitization business line offset by lower margins achieved on the ARWEN® product line due to the difference in product mix being sold over the comparable prior year period. The ARWEN® product line was refocused around reliable suppliers as well as manufacturing agreements and improved customer satisfaction with the continued elimination of the backlog of orders and speedier order fulfilment. Outlook Management expects revenue to continue to increase as it adds additional resources to fulfill its Canadian Government Defence programs. Management continues to work closely with industry partners and prime contractors on the outlook for growth. The Company also expects revenue to increase with continued growth in the ARWEN® business including the expected demand/future orders for the new 40mm ammunition and PARA SHOTTM products as well as the commercial launch of KWESST LightningTM. Management also expects the initial order of BLDS in the quarter to result in requests for additional networked prototypes ultimately resulting in future sales orders. Operating Expenses ("OPEX") Total OPEX decreased by a negligible amount from the comparable prior year period for the three months ended June 30, 2025, and decreased $0.4 million for the nine month period ended June 30, 2025 from the comparable prior year period mainly due to: Sales and marketing expenses increased by $0.2 million in the three month period ended June 30, 2025 and by $0.3 million in the nine month period ended June 30, 2025 over the comparable prior year periods, due to a change in the allocation of the Chairman and CEO's costs as a result of a shift in focus to business development, specifically for ARWEN® 40mm, PARA SHOTTM and KWESST LightningTM; Research and development expenses decreased by $0.1 million in the three month period June 30, 2025 and by $0.4 million in the nine month period ended June 30, 2025 over the comparable prior year periods, primarily due to a reduction in engineering costs related to the PARA SHOTTM products due to the Company now being in the commercialization stage and planning for production as compared to product development costs being incurred in the comparative prior year periods; Share-based compensation expenses decreased by a negligible amount and $0.1 million for the three and nine month periods ended June 30, 2025, respectively, over the comparable prior year periods due to options vesting and no additional options issued in the period: Depreciation and amortization expense decreased by a negligible amount and by $0.1 million for the three and nine month periods ended June 30, 2025, respectively, over the comparable prior year periods due to insignificant additions in the nine months ended June 30, 2025, with the exception of the right-of-use asset that was added in June 2025. Other income (expenses), net Total other income (expenses) decreased by $1.5 million and $3.4 million for the three and nine month periods ended June 30, 2025, respectively, over the comparable prior year period. The decrease is mainly due to: a $1.7 million and $1.7 million increase in the change fair value of warrant liabilities for the three and nine month periods ended June 30, 2025, respectively, over the comparable prior year periods as a result of the remeasurement of the warrant liabilities at June 30, 2025. Under IFRS, we are required to remeasure the warrant liabilities at each reporting date until they are exercised or expired; a $0.2 million and $0.1 million increase in the foreign exchange loss for the three and nine month periods ended June 30, 2025, respectively, over the comparable prior year periods due to the recent fluctuation in the CAD/USD exchange rate in the current period as the majority of the Company's cash is held in USD; and a $0.4 million decrease and $1.4 million increase for the three and nine month periods ended June 30, 2025, respectively, from the comparable prior year periods in share issuance costs due to the timing of financings. Major Highlights - Q3 Fiscal 2025 The following is a summary of the major highlights that occurred during Q3 Fiscal 2025: On April 1, 2025, the Company announced the results of its special meeting of shareholders. The consolidation resolution was approved by a majority of the votes cast by the holders of common shares of the Company, either present in person or represented by proxy. On April 21, 2025, the Company announced that it would effect a consolidation of the Company's issued and outstanding common shares on the basis of twenty-one (21) pre-consolidation Shares for each one (1) post-consolidation Share. The Consolidation was effective at 12:01 a.m. Eastern Daylight Time April 23, 2025, on the Nasdaq and was effective at 12:01 a.m. Eastern Daylight Time on April 24, 2025, on the TSX Venture Exchange. While the Shares were expected to begin trading on the Nasdaq market on a consolidated basis on or around April 23, 2025, due to the discrepancy in the effective date of the consolidation on both markets, trading in the securities of the Company was halted on April 23, 2025 and resumed trading on a consolidated basis on the Nasdaq and the TSX Venture Exchange at market open on April 24, 2025. On May 8, 2025, the Company announced that it received a notification letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC notifying the Company that it has regained compliance with the minimum bid price requirement set forth under Nasdaq Listing Rule 5550(a)(2). The Notification Letter confirmed that the Company evidenced a closing bid price at or greater than the USD$1.00 per common share minimum requirement for 10 consecutive business days from April 24, 2025 to May 7, 2025. As a result, the listing matter has been closed. On June 18, 2025, the Company announced receipt of a first order from a defense systems integrator for testing prototypes of its newest generation of the BLDS for a major North American armored vehicle program. On August 4, 2023, the Company delivered earlier versions of the BLDS technology to an overseas NATO country through a European defense integrator. On June 25, 2025, the Company announced that it changed its name to "DEFSEC Technologies Inc." at the opening of its expanded new facility at 80 Hines Road in Kanata North, Ottawa, Ontario. The change became official on June 30, 2025. Subsequent Event: On July 25, 2025, the Company issued 673,084 common shares and 86,795 pre-funded warrants of the Company as part of a public offering, together with common share purchase warrants to purchase up to 759,879 common shares at a combined public offering price of $8.955 per share or pre-funded warrant and accompanying warrant for gross proceeds of $6.8 million. The warrants have an exercise price of $10.52 per share, are exercisable upon issuance and expire five years following the date of issuance. For further information, please contact: Jennifer Welsh, Chief Financial Officer and Chief Compliance Officer [email protected] Sean Homuth, President and Chief Executive Officer [email protected] Jason Frame, Investor Relations +1 (587) 225-2599 [email protected] About DEFSEC DEFSEC (TSXV: DFSC) (TSXV: DFSC.WT.U) (NASDAQ: DFSC) (NASDAQ: DFSCW) (FSE: 62U2) develops and commercializes breakthrough next-generation tactical systems for military and security forces. The company's current portfolio of offerings includes digitization of tactical forces for real-time shared situational awareness and targeting information from any source (including drones) streamed directly to users' smart devices and weapons. Other DEFSEC products include countermeasures against threats such as electronic detection, lasers and drones. These systems can operate stand-alone or integrate seamlessly with OEM products and battlefield management systems, and all come integrated with TAK. The company also has a new proprietary non-lethal product line branded PARA SHOTTM with applications across all segments of the non-lethal market, including law enforcement. The Company is headquartered in Ottawa, Canada, with representative offices in London, UK and Abu Dhabi, UAE. Forward-Looking Statements This press release contains "forward-looking statements" and "forward-looking information" within the meaning of Canadian and United States securities laws (collectively, "forward-looking statements"), which may be identified by the use of terms and phrases such as "may", "would", "should", "could", "expect", "intend", "estimate", "anticipate", "plan", "foresee", "believe", or "continue", the negative of these terms and similar terminology, including references to assumptions, although not all forward-looking statements contain these terms and phrases. Forward-looking statements are provided for the purpose of assisting the reader in understanding us, our business, operations, prospects and risks at a point in time in the context of historical and possible future developments and therefore the reader is cautioned that such information may not be appropriate for other purposes. Such forward-looking statements are based on the current expectations of DEFSEC's management and are based on assumptions and subject to risks and uncertainties. Although DEFSEC's management believes that the assumptions underlying such forward-looking statements are reasonable, they may prove to be incorrect. The forward-looking statements discussed in this press release may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting DEFSEC, including DEFSEC's inability to secure contracts and subcontracts (on the timelines, size and scale expected or at all), statements of work and orders for its products in 2025 and onwards for reasons beyond its control, the renewal or extension of agreements beyond their original term, the granting of patents applied for by DEFSEC, inability to finance the scale up to full commercial production levels for its physical products, inability to secure key partnership agreements to facilitate the outsourcing and logistics for its ARWEN® and PARA SHOTTM products, inability to commercialize DEFSEC's next generation Battlefield Laser Detection System, inability to secure or complete the execution of government contracts, inability to drive growth in DEFSEC's ARWEN® product line, inability to advance the commercialization of DEFSEC's PARA SHOTTM products, delay or inability to launch DEFSEC's Lightning SaaS offering, lower than expected or delayed demand for DEFSEC's BLDS, overall interest in DEFSEC's products being lower than anticipated or expected; general economic and stock market conditions; a stagnation or decrease in North American defense and public safety spending, adverse industry events; future legislative and regulatory developments in Canada, the United States and elsewhere; the inability of DEFSEC to implement and execute its business strategies; risks and uncertainties detailed from time to time in DEFSEC's filings with the Canadian Security Administrators and the United States Securities and Exchange Commission, and many other factors beyond the control of DEFSEC. Although DEFSEC has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and DEFSEC undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Neither the TSX Venture Exchange nor its respective Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Non-IFRS Measures This news release makes reference to certain non-IFRS measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS, and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. The non-IFRS measure used in this news release includes "Adjusted EBITDA". The Company calculates Adjusted EBITDA as a sum of revenue, cost of goods sold, general and administrative expense, sales and marketing expense, and research and development expense as determined by management. Adjusted EBITDA is provided to assist readers in determining the ability of the Company to generate cash from operations and to cover financial charges. Management believes that Adjusted EBITDA provides useful information to investors as it is an important indicator of an issuer's ability to generate liquidity through cash flow from operating activities and equity accounted investees. Adjusted EBITDA is also used by investors and analysts for assessing financial performance and for the purpose of valuing an issuer, including calculating financial and leverage ratios. The most directly comparable financial measure that is disclosed in the financial statements of the Company to which the non-IFRS measure relates is operating loss. To view the source version of this press release, please visit https://www.newsfilecorp.com/release/262333