Kraken Establishes German Subsidiary

ST. JOHN'S, NL--(Marketwired - December 07, 2016) - Kraken Sonar Inc. (TSX VENTURE: PNG) is pleased to announce that effective January 1, 2017, its new German subsidiary, Kraken Robotik GmbH (KRG) will commence operations at the Bremen Innovation and Technology Centre. The move to expand operations into Germany corresponds to strong growth in the region where Kraken has an increasing base of customers and strategic partners.

In addition to customer support, KRG will focus on the development of 3D imaging sensors, machine learning and artificial intelligence (AI) algorithms for underwater robotic platforms. Machine learning is a type of AI that provides robots with the ability to learn without being explicitly programmed. Machine learning focuses on the development of software that can teach robotic platforms to be cognitive and adaptive when exposed to new data.

"We believe that underwater robotics technology has finally reached its tipping point," said Karl Kenny, Kraken's President & CEO. "Today's underwater robotics industry can be compared to the digital photography industry; over the past 15 years we've gone from 35mm film to now having camera sensors on a chip and images in the cloud. Next generation underwater robotic platforms will also be sensor-centric to reduce costs and simplify their ease of use. The future of underwater robotics will be less about commodity hardware and more about innovative sensors using very smart algorithms and artificial intelligence. That's the fundamental thinking that led us to establish KRG in Bremen."

KRG will be led by Dr. Jakob Schwendner as Managing Director. Jakob spent 10 years at DFKI, (the German Research Center for Artificial Intelligence) as an expert in autonomy, systems and software engineering for robotics, mission management, SLAM navigation, embedded systems, sensor processing and sensor fusion. Jakob received his PhD in Robot Navigation in 2013 and since then had led a multi-disciplinary team on autonomy. He has defined, managed and worked in numerous projects in both space and underwater robotics.

Dr. Jakob Schwendner, Managing Director of Kraken Robotik GmbH, said, "While there has been marked progress in Autonomous Underwater Vehicle (AUV) development, we want to focus on advancing underwater robotic vehicle autonomy. KRG efforts will explore methods of deploying AUVs in a broader range of subsea docking applications, sensor fusion, big data analytics and machine learning. These technologies will make it simpler and cheaper to complete underwater tasks."

Robotics Industry Forecasted to be a US$67 Billion Market

Approximately four decades ago, industrial robots began transforming manufacturing. With their reprogrammable arms, they performed tasks such as welding, painting and the lifting and placing of objects, all of which were based on monotonous regularity. Today's robots perform these tasks and much more. They build cars, remove land mines, assist with surgical procedures and perform underwater inspections. The Boston Consulting Group estimates that US$67 billion will be spent worldwide in the robotics sector by 2025, compared to US$11 billion in 2005.

Automation itself is also changing, and industry experts agree that the next big thing will be the introduction of truly autonomous systems. What this means is that in the not-too-distant future, robots will no longer require tedious programming. Using machine vision, motion sensors, image recognition and advanced machine learning, they will be able to handle increasingly intelligent work, including interacting with and continuously learning from their environment.

About Autonomous Underwater Vehicles

These technological advances will also apply to next generation Autonomous Underwater Vehicles (AUVs). AUVs provide a means to improve underwater surveys and inspections in a way that take people out of potentially hazardous environments.

Because AUVs have no umbilical and can operate at a distance from a support vessel, they offer many advantages over the industry-dominant Remotely Operated Vehicles (ROVs). Unlike tethered ROVs, AUVs can work in obstructed areas, maneuvering themselves to a work site using a self-contained power system and finding their way at a specified depth and speed using internal and external positioning sources. AUVs are typically more compact than ROVs and can work closer to subsea assets and with the potential of producing more accurate data.

AUVs can deliver cost-effective inspections in ultra-deep water and are being used to survey and inspect pipelines and flowlines and to verify the integrity of subsea structures. AUVs also are being used in geohazard surveys to obtain information on seabed conditions and to identify potentially hazardous subsurface objects. And more frequently, AUVs are being used for as-built surveys to verify newbuild pipeline conditions.

Unlike forecasts for many sectors in the offshore industry, the outlook for the AUV market is positive. Douglas Westwood's most recent edition of the World AUV Market Forecast suggests that prospective demand for AUVs in a range of sectors will grow over the next five years. AUV demand is expected to grow nearly 50% over the next four years. Interestingly, the report identifies growth potential in the offshore renewables sector in addition to oil and gas applications, noting that these areas will have the greatest growth.

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.