Kraken and Fraunhofer Sign Technology Licensing Agreement for Underwater Robotics

ST. JOHN'S, NL--(Marketwired - March 15, 2017) - Kraken Sonar Inc. (TSX VENTURE: PNG) announced today that in a strategic move to further strengthen its IP portfolio, it has signed an exclusive licensing agreement for underwater robotics technology with Germany's Fraunhofer Institute for Optronics, System Technologies and Image Exploitation (IOSB).

Fraunhofer is the largest organization for applied research in Europe with 69 institutes, over 24,500 employees and a EUR2.1 billion annual budget. Since 2012, Fraunhofer has been developing intellectual property and technology related to underwater robotics. Over C$6 million has been invested in Fraunhofer's underwater sensor robotics programs, culminating in the development of the DEDAVE Autonomous Underwater Vehicle (AUV).

"Our team is very impressed with many features of the DEDAVE's unique design, including the open-frame architecture, tool-free access to payload sections and faster turnaround with pressure tolerant components," said David Shea, Kraken's VP Engineering. "As ocean technology engineers, we know that every component in the ocean environment has a finite lifetime and eventually will fail and need to be repaired or replaced. The DEDAVE architecture is extremely robust and easily serviceable with limited training, and without specialized tooling or handling equipment. For example, during recent testing, the vehicle was opened, pressure-tolerant batteries replaced, and turned around in less than 15 minutes. While pressure-tolerant batteries are not a new concept, the DEDAVE batteries are inexpensive enough to justify keeping two or three sets on-hand; one installed the vehicle, one charging and one fully-charged ready for use."

Kraken plans to upgrade the DEDAVE vehicle with larger sensors, including Kraken's MINSAS 120 sonar with Real Time SAS Processor. The vehicle size will be increased by about 30% to support the larger payload capacity. The addition of tunnel thrusters will also provide a hovering capability for target inspection and precision maneuvering.

"Access to the DEDAVE IP, combined with our existing AUV IP portfolio, significantly reduces our development cost and lead-time and mitigates the technical risk for Kraken's underwater robotics," said Mr. Shea. "In addition, access to the DEDAVE prototype vehicle means we can start in-water testing as soon as possible, reducing our overall time to market and providing potential revenue generation to support our development program."

Licensing Agreement
While the specific terms of the agreement are confidential, Kraken will exclusively license the DEDAVE software and hardware IP and technology for large AUVs and acquire the 6000m rated DEDAVE AUV as a sensor and robotics technology demonstration platform. In addition, Kraken will establish a long term technical co-operation program with Fraunhofer for hydrodynamic control systems, mission planning and autonomy algorithms that can be deployed in Kraken's upcoming ThunderFish® AUV program.

Prof. Dr. Thomas Rauschenbach, Head of the Advanced System Technology Branch of Fraunhofer IOSB said, "Scientists and engineers at the Fraunhofer IOSB have been studying and developing underwater robots and data processing for sonar systems for many years. We are delighted to have found an industrial partner with significant expertise in both maritime sensor and robotics technology. We look forward to a long-term relationship with Kraken and will help them continue to develop advanced robotic technologies that can be commercialized in world class products."

Dr. Jakob Schwendner, Managing Director of Kraken Robotik GmbH in Bremen said, "We look forward to furthering our relationship with Fraunhofer. The heart of underwater robots are software algorithms - in other words the artificial intelligence interacting with the sensors and interpreting the data received, and thereafter directing the robot to take appropriate action. In addition, innovative command and control software facilitates the functioning of multiple sensors to help the vehicle autonomously perform missions. With smart software operating on inexpensive, yet high performance computers, AUVs can migrate from being automated to being truly autonomous. The AUV can make decisions on their own while the mission is still under way and change their mission objective based on the sensor data that they receive. In essence, the vehicle becomes cognitive and adaptive."

Karl Kenny, Kraken President and CEO said, "Kraken and Fraunhofer have been collaborating in a successful customer-vendor relationship for the past several years. This new agreement takes our relationship to a whole new level. As the largest organization for applied research in Europe, Fraunhofer has significant expertise with vehicle control systems engineering. This experience, when combined with our internally developed robotics capability and the talent in our recently opened Bremen office will position Kraken as a leading contender in the underwater robotics industry. In fact, internally developed technology; acquisitions of intellectual property; and licensing agreements has enabled Kraken to build a maritime sensor and robotics technology portfolio that easily exceeds C$20 million."

ABOUT THE DEDAVE AUV
The DEDAVE AUV was developed to create a versatile and compact vehicle that is easier to handle than existing systems while providing more space for payloads and faster turn-around times. DEDAVE can operate in ocean depths up to 6,000 meters. The AUV is equipped with state-of-the-art sensor systems - including Kraken's AquaPix® MINSAS sonar; easily exchangeable battery and data storage modules; and a distributed control infrastructure. This allows the AUV to be quickly adapted to different missions, fast integration of additional sensors and to add more battery capacity to increase operational endurance.

The modular design of the DEDAVE AUV enables the creation of a family of AUVs for different diving depths, mission durations and payload requirements. The AUV consists of several individual sections that contain different vehicle components. The bow section contains obstacle avoidance sensors, an emergency weight drop system and an optional diving plane. Two energy sections with multiple battery modules are located near the bow and stern. The control and navigation section houses the control computer, the inertial navigation system, an acoustic modem with USBL function, the emergency and communication unit and a sound velocity sensor. The AUV can handle payload interfaces including Ethernet, serial port or CAN bus.

More information about the AUV can be found below:

http://www.DEDAVE.de

http://www.cnn.com/videos/tv/2016/06/30/exp-DEDAVE-underwater-exploration-vehicle.cnn

http://newatlas.com/DEDAVE-autonomous-underwater-vehicle/41629/

Kraken's engineering team has been working closely with the DEDAVE development team since integrating the first 6000m rated MINSAS60 sonar into the DEDAVE in 2015. This provided the Kraken team first-hand experience with the unique and innovative aspects of the DEDAVE AUV.

ABOUT FRAUNHOFER
The Fraunhofer-Gesellschaft is the leading organization for applied research in Europe. Its research activities are conducted by 69 institutes and research units at locations throughout Germany. The Fraunhofer-Gesellschaft employs a staff of 24,500, who work with an annual research budget totaling 2.1 billion euros. Of this sum, 1.9 billion euros is generated through contract research. More than 70 percent of the Fraunhofer-Gesellschaft's contract research revenue is derived from contracts with industry and from publicly financed research projects. International collaborations with excellent research partners and innovative companies around the world ensure direct access to regions of the greatest importance to present and future scientific progress and economic development. Fraunhofer gained worldwide recognition after scientists in one of its institutes invented the patented MP3 audio compression system - an invention that forever changed the music and entertainment industry and the way in which we use music and audio.

ABOUT KRAKEN SONAR INC.
Kraken Sonar Inc. (TSX VENTURE: PNG) is a marine technology company, founded in 2012, that is dedicated to the production and sale of software-centric sensors and underwater robotic systems. 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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