Liberty Defense's $5.2M Capital Play to Scale AI Security Tech

WILMINGTON, Mass. – December 02, 2025 – In a move signaling a clear intent to transition from development to large-scale deployment, Liberty Defense Holdings Ltd. has announced a non-brokered private placement to raise up to C$5.2 million. While capital raises are routine for venture-stage tech firms, this particular financing is a story of strategic timing, regulatory advantage, and a calculated bet on dominating the future of public safety technology. The funds are earmarked to scale production of its flagship HEXWAVE system, an AI-powered concealed weapons detector, turning a year of reported momentum into tangible market penetration.

For investors and industry analysts tracking the security sector, Liberty's move is more than just a line item on a balance sheet; it's a critical inflection point. The company aims to leverage what its CEO, Bill Frain, calls a "breakout year" and a "growing backlog" by securing the capital needed to move its MIT-licensed technology from pilot projects to widespread installation in high-traffic venues like airports, stadiums, and schools. This financing is the fuel intended to power that leap.

Decoding the Deal's DNA: The LIFE Exemption

At the heart of the transaction is a financing structure that speaks volumes about the current capital markets environment for small-cap Canadian issuers. Liberty is utilizing the Listed Issuer Financing Exemption (LIFE), a relatively new and powerful tool designed by Canadian securities regulators. The offering consists of up to 20 million units at C$0.26 each, with every unit comprising one common share and one purchase warrant.

For those outside the intricacies of Canadian securities law, the LIFE exemption is a game-changer. Introduced in 2022 and with recently expanded capital limits, it allows established public companies to raise money more efficiently, bypassing the costly and time-consuming process of a full prospectus. Instead, they can rely on their continuous disclosure record, supplemented by a shorter offering document. This lowers the barrier to capital, but more importantly for investors, the securities issued are not subject to the typical four-month statutory hold period. This immediate liquidity is a significant draw, broadening the potential investor base beyond traditional institutional players to include retail investors who might otherwise be hesitant to lock up funds. By employing this mechanism, Liberty is not only accessing capital quickly but is also making its offering more attractive to a wider audience.

The deal's architecture includes further strategic nuances. Each warrant allows the holder to purchase an additional share at C$0.35 for a 24-month period. Critically, these warrants contain an acceleration clause: if Liberty's stock price closes at or above C$0.75 for five consecutive trading days, the company can trigger an expedited 5-day expiry on the warrants. This is a bullish feature, creating a scenario where strong market performance could lead to a second wave of capital infusion as warrant holders exercise their rights, further strengthening the company's financial position for future growth.

From Backlog to Balance Sheet: Fueling Production

The strategic timing of this raise is directly tied to market demand. In the press release, CEO Bill Frain stated, “Following a breakout year for our technologies and a growing backlog, Liberty Defense is launching this latest financing to ensure we can advance our strategic plan and scale to meet rising demand.” The explicit use of proceeds is telling: the primary allocation is for purchasing inventory to ramp up the production of HEXWAVE units. This is a direct response to a market increasingly seeking advanced, less invasive security solutions.

Public venues are under immense pressure to enhance security without creating bottlenecks or a fortress-like atmosphere. Traditional metal detectors are limited, and full-body scanners are often too slow or intrusive for high-throughput environments. This is the gap Liberty's technology aims to fill. The HEXWAVE system uses millimeter wave technology, 3D radar imaging, and artificial intelligence to detect metallic and non-metallic threats—including 3D-printed guns, ghost guns, and improvised explosives—discretely and from a distance. The system is designed to be modular and scalable, allowing for a layered security approach that scans individuals as they walk through an area without requiring them to divest keys, wallets, or phones.

This capital infusion is the essential link between possessing innovative technology and fulfilling large-scale orders. Without sufficient inventory and a robust supply chain, a growing backlog can quickly become a liability rather than an asset. By investing directly in production capacity, Liberty is signaling to the market and potential large-scale clients that it is ready to execute and deliver on its promises.

The Competitive Edge in Threat Detection

Liberty Defense operates in a dynamic and increasingly crowded field, but its multi-technology portfolio provides a distinct competitive advantage. The exclusive license for the HEXWAVE technology from the Massachusetts Institute of Technology (MIT) lends significant credibility and a deep technological foundation. Unlike competitors focused on a single modality, Liberty's portfolio also includes millimeter wave-based High-Definition Advanced Imaging Technology (HD-AIT) body and shoe scanners, allowing it to offer comprehensive, tailored solutions for different security checkpoints.

This financing enables the company to not only produce its existing technology but also to continue innovating and solidifying its market leadership. The funds allocated for investor relations and marketing are crucial for translating technological superiority into brand recognition and sales. In the security industry, trust and proven performance are paramount. As Liberty deploys more units, each successful implementation becomes a powerful case study, building the reputation needed to win contracts with major airports, sports leagues, and government facilities.

Ultimately, this C$5.2 million financing is far more than a simple cash injection. It is a strategic maneuver designed to accelerate Liberty Defense's transition from a promising tech developer to a major operational player in the global security market. The combination of an agile financing tool, clear market demand, and a well-defined plan to scale production places the company at a pivotal moment, with its performance in 2026 poised to demonstrate whether it can truly capitalize on its innovative edge.