Kraken Acquires Marine Robotics Technology

ST. JOHN'S, NL--(Marketwired - November 17, 2015) - Kraken Sonar Inc. ("Kraken") (TSX VENTURE: PNG) announced today that its wholly-owned subsidiary, Kraken Sonar Systems Inc. has acquired the underwater robotics technology and related intellectual property rights previously owned by Marine Robotics Inc. Terms of the acquisition were not disclosed.

"We believe that the ocean drone market is at an inflection point and set for major growth," said Karl Kenny, President and CEO of Kraken. "This acquisition brings us a significant underwater technology and IP portfolio and continues to build on our sensors-to-systems strategy to be a market leader in the Unmanned Maritime Systems industry."

Included in the assets acquired are: all underwater robotics technology, intellectual property and related physical assets -- including an operational SQX-500 Unmanned Underwater Vehicle (refer to the section below for more details). In addition, the majority of the senior electrical, mechanical and software engineers that were previously employed by Marine Robotics Inc. are now Kraken employees.

"Military and commercial operators are starting to significantly invest in this market as the cost of utilizing drones is much less than conventional manned platforms," said Mr. Kenny. "The acquisition of Marine Robotics' technology, physical assets and intellectual property is a great accelerator for Kraken. Kraken is making a significant investment in underwater robotics technology with developments such as our recently announced KATFISH intelligent towbody platform. This acquisition will help support the growing needs of our military and commercial clients."

ABOUT MARINE ROBOTICS INC.

Marine Robotics Inc. ceased operations following the receivership of its parent, Marport Deep Sea Technologies Inc. During its existence, Marine Robotics Inc. invested several million dollars in the development of unmanned technology and contributed to building a world-class ocean technology capability in St. John's, Newfoundland. The company had extensive collaboration with Canada's National Research Council -- Institute for Ocean Technology, the Marine Institute, the Autonomous Ocean Systems Laboratory at Memorial University and many international partners. Newfoundland and Labrador has become a centre of expertise in ocean technology and Kraken will continue to contribute to growth of the sector.

ABOUT UNMANNED MARITIME SYSTEMS

Unmanned Maritime Systems (also called ocean drones) are comprised of Unmanned Underwater Vehicles (UUVs) and Unmanned Surface Vehicles (USVs). These systems are now transitioning from research and development experiments to being deployed for real world, mission-critical applications.

Driven by their steadily improving capabilities, ocean drones are being called upon for tough missions in national defence, offshore energy and subsea survey. These platforms enable commercial customers to operate their missions more cost-effectively than with manned vessels. For the military, ocean drones augment conventional naval assets while reducing the risk to humans.

The military sector makes up the majority of today's demand but analysts expect significant growth from the commercial sector. Key enabling technology developments have taken place in such areas as battery endurance, platform stability and next generation sensors such as Synthetic Aperture Sonar. These advances allow a wide range of new applications to emerge in offshore energy (life-of-field, pipeline inspections and ocean renewables) as well as seabed survey and science.

Underwater robotics will be an essential technology of the future as human dependence on ocean resources increases. The demand for Unmanned Maritime Systems will continue to increase as military and commercial services augment their fleets with robotic platforms. As an example, industry analysts Market Info Group LLC estimate that the global Unmanned Maritime Systems market will reach over US$10 Billion (cumulative) by 2020.

ABOUT THE SQX-500 UNMANNED UNDERWATER VEHICLE

The SQX-500 Unmanned Underwater Vehicle is a hydro-dynamically stable platform designed for reliable performance and low life-cycle cost. The vehicle's dual-pod design enables exceptional stability and its thrust controllers are tuned for near-hovering capabilities. The vehicle is a departure from traditional designs and enables the SQX platform to hover or transit laterally, vertically, forward, and reverse, combined with stealthy low-speed manoeuvres. The vehicle can be equipped with modular payloads and configured for a wide variety of standard and/or custom sensors to meet unique underwater mission requirements.

From 2007 to 2010, Marport's Autonomous Systems department developed technologies and intellectual property in the field of Unmanned Underwater Vehicles (UUVs). In 2011, the Autonomous Systems department was spun-off into a wholly-owned subsidiary, Marine Robotics Inc. (MRI). MRI's extensive research and development activities culminated in the production of an innovative UUV, the SQX-500. The SQX-500 is a twin-pod vehicle, inherently stable in pitch and roll, and designed for a multi-mission capability. One of the key discriminating capabilities developed in the SQX was its unique, innovative vectored thrust propulsion system, which allowed for hydro-dynamically efficient high-speed transit, as well as low-speed and zero-speed hovering and inspection maneuvers, independent of vehicle heading or water current.

The SQX includes a number of technologies which will be leveraged into Kraken's Unmanned Systems group:

• Fully-redundant, fault-tolerant power distribution system
• Field replaceable actuators and thrusters
• Oil-compensated, pressure-tolerant electronics
• Robust, high reliability fault management and fault response system
• Modular, hardware-independent control system design
• Self-calibrating, non-ITAR (International Traffic in Arms Regulations) navigation solution
• Highly robust data compression and communication encoding scheme

The SQX control system design is highly modular, developed for simple reconfiguration to support a variety of vehicle geometries, sensors and actuators. The autonomous control system was validated with over 1000 hours of at-sea operational testing in Conception Bay, Newfoundland, at depths over 275m. At its core, the SQX-500 control system codebase is very mature, composed of software modules for sensor interfaces, mission management, and autonomous control. Despite the substantial code footprint, and computational overhead required for executing complex autonomous maneuvers, the entire SQX control system software is able to run on a single low-power embedded processor.

The SQX's non-ITAR navigation system includes innovative self-calibration routines, to allow in-situ at-sea calibration of the navigation system sensors. This allows for effective use on a ship of opportunity, and eliminates the requirement for knowing a-priori the high-precision alignment between vehicle navigation sensors, particularly after vehicle maintenance, battery replacement or payload swap.

Leveraging these assets and IP will allow Kraken to significantly reduce the cost and risk of future unmanned vehicle developments, including the recently announced active towfish, the KATFISH. In particular, Kraken will be leveraging the innovative actuator and propulsion system design, as well as components of the control system design.

ABOUT KRAKEN SONAR INC.

Kraken Sonar Inc. (TSX VENTURE: PNG) is an industrial technology company, founded in 2012, that is dedicated to the production and sale of software-centric Synthetic Aperture Sonar (SAS) sensors and systems. The Company's products are sold to leading defence contractors, commercial survey companies and research institutions for producing real-time, ultra-high resolution imagery and bathymetry of the seabed. For more information, please visit www.krakensonar.com.

Neither the TSX Venture Exchange Inc. nor its Regulation Services Provide (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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