Non-Dilutive Capital to Support the Development of KATFISH Sonar Towfish Platform

ST. JOHN’S, NL–(Marketwired – November 04, 2015) – Kraken Sonar Inc. (“Kraken”) (TSX VENTURE: PNG) is pleased to announce that its wholly-owned subsidiary, Kraken Sonar Systems Inc., has been awarded $750,000 by the Research & Development Corporation (RDC) of Newfoundland and Labrador.

Karl Kenny, President and CEO of Kraken, said, “We are grateful to RDC for their support of our efforts and appreciate their thorough review of our development program. We look forward to continuing to develop innovative marine technologies and products to meet the ever evolving demands of our growing customer base.”

KRAKEN’S KATFISH SURPASSES CONVENTIONAL SONAR SYSTEMS

Kraken’s KATFISH is an actively controlled, intelligent towfish platform used to generate real-time, ultra-high resolution seabed imagery and maps for a variety of military and commercial applications. The system’s primary sensors are based on Kraken’s Interferometric Synthetic Aperture Sonar technology, real-time Synthetic Aperture Sonar (SAS) processing algorithms and acoustic velocity sensors.

Traditional conventional side scan systems are limited in that they only provide high resolution imagery at very short ranges. KATFISH produces ultra-high resolution seabed imagery with constant resolution to full range. The additional information provided by the KATFISH system delivers a detection and classification capability that cannot be achieved with a conventional sidescan sonar. The entire system is designed to be quickly installed and removed from craft of opportunity platforms and is packaged for easy transportation.

Kraken’s sonar and underwater systems are gaining traction in the rapidly growing Unmanned Maritime Systems drone market, which is primarily comprised of Unmanned Underwater Vehicles (UUVs) and Unmanned Surface Vessels (USVs).

KRAKEN’S KATFISH ADDRESSES A NAVAL WARFARE INFLECTION

The future of naval warfare continues to evolve toward smaller vessels, littoral operations and underwater intelligence, surveillance and reconnaissance missions. SAS technologies, such as that produced by Kraken, have now matured to support solutions that can economically survey and detect small objects hidden on the seabed and be able to go into confined spaces where underwater explosives are likely to be hidden.

The underwater defence market is evolving rapidly; responding to changing threats, tensions in the Middle East and Asia, economic and budgetary pressures and a growing eagerness by modern navies and developing countries alike to procure and deploy ocean drones such as UUVs and USVs.

UUVs are a proven technology that have been used for many years, mostly for mine countermeasures, oceanographic research and oil & gas surveys. In contrast, USVs, the naval equivalent of unmanned aerial vehicles (air drones) have not been widely used. While the technology for USVs is in its infancy compared with the aerial drones, this situation is about to significantly change.

Unmanned vessels, like unmanned aerial vehicles, provide military forces with reach and capability without the risk of manned systems. They keep the dull, dirty and dangerous jobs away from human personnel.

USV technology is maturing rapidly, and a number of USVs are market-ready, signaling a coming sea change in the makeup of the overall Unmanned Maritime Systems (UMS) market.

Industry analysts Market Info Group LLC estimate that the global Unmanned Maritime Systems market will reach US$11 Billion (cumulative) by 2020.

To view “Unmanned Maritime Systems Market Growth”: http://media3.marketwire.com/docs/UnmannedMaritimeSystemsMarketGrowth.jpg

ABOUT RDC AND ITS FUNDING OF KRAKEN

RDC is a provincial Crown corporation responsible for improving Newfoundland and Labrador’s research and development performance. RDC works with research and development stakeholders including business, academia, and government agencies and departments to make strategic investments in highly qualified people, R&D infrastructure, and innovative research. Additional information about RDC can be found at: www.rdc.org. Kraken’s funding contribution was provided under RDC’s SensorTECH initiative. SensorTECH is a research program targeted towards sensor research, development and demonstration in simulated and real operating environments. Remote sensing often involves technologies that collect and analyze data to characterize an object, geographic area, or physical environment from a distance using aircraft, satellites, unmanned maritime vehicles and other research platforms.

The goal is to advance R&D in support of the development of sensor technologies and to enhance remote sensing R&D capacity in Newfoundland and Labrador; enable technology commercialization and resource development, and; leverage local, national and/or international collaboration to drive sensor research, development and deployment.

The SensorTECH funding will be used during 2015 and 2016 to help develop Kraken’s KATFISH sonar towfish platform. KATFISH generates real-time, ultra-high resolution seabed imagery and maps for both manned and unmanned military and commercial applications.

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.