ST. JOHN’S, NL–(Marketwired – May 31, 2016) – Kraken Sonar Inc. (TSX VENTURE: PNG) announced it has filed its financial results for the first quarter ended March 31, 2016. Additional information concerning the Company, including its condensed consolidated interim financial statements and related management’s discussion and analysis (“MD&A”) for the quarter ended March 31, 2016, can be found at www.sedar.com. Unless otherwise stated, all dollar amounts are Canadian dollar denominated.

Q1 2016 Financial Highlights

• The net loss in the quarter was $0.1 million versus a net loss of $0.8 million in the year ago quarter.
• Revenues for the three months ended March 31, 2016 were $0.7 million as compared to $0.5 million in the comparable year ago period. We note that none of the $0.6 million order from Woods Hole Oceanographic Institution (WHOI, announced March 15) was recognized during the quarter.
• Kraken ended Q1 2016 with $0.7 million in working capital and was debt free. At the end of Q1, Kraken had over $1.9 million in customer contract milestone payments and awarded financial contributions payments, not yet received. We expect more than 90% of this amount will be collected during 2016.
• Cash decreased approximately $0.5 million from the December quarter. The decrease was mainly due to changes in non-cash working capital, specifically increases in inventory and receivables. The Company has an unused credit line with RBC for $250,000.
• Subsequent to quarter end, Kraken received repayment of the shareholder loan receivable of approximately $0.2 million and this week expects to receive more than $0.4 million from collection of a customer receivable.
• Basic and diluted weighted average shares outstanding were unchanged at 71 million.

CEO Comments
“I am pleased with our progress on multiple fronts. We are nicely positioned for several new business opportunities that continue to evolve with leading military and commercial customers,” stated Karl Kenny, President and CEO of Kraken. “During the first quarter the Kraken team continued to execute on the delivery of our Sensors-to-Systems strategy. The advanced capabilities and price/performance value of our products make them ideal for next generation subsea survey applications.”

Outlook for the Balance of 2016
“We are very excited about our pipeline of opportunities and continue to expect a material ramp in bookings and revenues versus 2015,” said Mr. Kenny. “Our KATFISH™ is receiving excellent market feedback and we expect to ship our first product to Elbit Systems Ltd. later this year. We are seeing significant other multi-unit sales opportunities for KATFISH™ and our AquaPix® sensors. At an average selling price of US$1.5 million per unit, KATFISH™ should drive considerable revenues compared to our historical financials. In addition, we anticipate concluding additional strategic partnerships in 2016, both for new products and distribution, across both military and commercial channels. Based on current discussions, we expect to conclude at least two of these partnerships within the next three months.”

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 technology. The Company’s products have been sold to leading defence contractors, commercial survey companies and research institutions for producing real-time, ultra high resolution imagery and bathymetry of the seabed. Marine Technology Reporter has three times named Kraken to their MTR100 — a list of the 100 most influential companies in the international marine technology marketplace. For more information, please visit www.krakensonar.com. 

Certain information in this news release constitutes forward-looking statements. When used in this news release, the words “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “seek”, “propose”, “estimate”, “expect”, and similar expressions, as they relate to the Company, are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to, among other things, business objectives, expected growth, results of operations, performance, business projects and opportunities and financial results. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Such statements reflect the Company’s current views with respect to future events based on certain material factors and assumptions and are subject to certain risks and uncertainties, including without limitation, changes in market, competition, governmental or regulatory developments, general economic conditions and other factors set out in the Company’s public disclosure documents. Many factors could cause the Company’s actual results, performance or achievements to vary from those described in this news release, including without limitation those listed above. These factors should not be construed as exhaustive. Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in this news release and such forward-looking statements included in, or incorporated by reference in this news release, should not be unduly relied upon. Such statements speak only as of the date of this news release. The Company does not intend, and does not assume any obligation, to update these forward-looking statements. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

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.

For further information, please contact:

Greg Reid
Chief Financial Officer
(416) 818-9822
[email protected]

Sean Peasgood
Investor Relations
(416) 565-2805
[email protected]

Glenda Leyte
Marketing Manager
(709) 757-5757 extension 288
[email protected]