Kraken Receives Financial Contribution From the Government of Canada

ST. JOHN'S, NL--(Marketwired - February 08, 2016) -  Kraken Sonar Inc. (Kraken) (TSX VENTURE: PNG) announced today that its wholly-owned subsidiary, Kraken Sonar Systems Inc. will receive a non-refundable financial contribution of up to $495,000 from the National Research Council of Canada Industrial Research Assistance Program (NRC-IRAP).

In addition to technical and business advisory services provided by NRC-IRAP, the funding is being used to develop the Kraken Active Towed Fish (KATFISH) for high speed, high resolution seabed mapping. The system will enable real-time seabed imagery, bathymetry and advanced 3D digital terrain models of the seabed. KATFISH will enable seabed mapping missions optimized for both manned and unmanned surface vessels.

Karl Kenny, Kraken's President and CEO, said, "We are very grateful for the continued support from NRC-IRAP. Their assistance enables us to continue to innovate our seabed survey solutions. We've stated on many occasions that cost effective and high resolution seabed mapping is mission-critical for many military and commercial applications. Placing a survey sensor -- such as Kraken's Miniature Synthetic Aperture Sonar -- closer to the seafloor will result in the acquisition of much higher resolution data. When the sensor is integrated onto a high speed, intelligently stabilized towed platform such as KATFISH, better quality data is acquired at a faster rate, thus improving efficiency and lowering both operational and data acquisition costs. In fact, we believe that KATFISH provides the highest resolution seabed pixels at the lowest cost compared to any other competing survey sonar platform."

The business case for the KATFISH system involves two clearly identified and distinct markets: commercial seabed survey and underwater defence.

KATFISH TARGETING THE COMMERCIAL SEABED SURVEY MARKET
In the commercial seabed survey market the offshore oil and gas production industry has increased the need for surveys of existing infrastructure (such as pipelines and subsea installations). Presently, this process is completed with slow moving (1-2 knots) Remotely Operated underwater Vehicles (ROV), or passively stable sonar systems at medium (3-4 knots) speeds. KATFISH operates at 8 knots.

Offshore exploration and production companies require comprehensive, high-resolution surveys to ensure the integrity of these pipelines, as well as the engineering and development of underwater facilities. The results of these surveys must show detailed bottom topography, surface features such as boulders, outcrops, debris, pockmarks, drag marks, and gas vents, as well as sub-bottom features such as faults, shallow gas pockets and sediment structure.

Reducing the cost and complexity of marine survey operations can profoundly impact the economics of many marine industries. Driven by lower revenue and energy prices, today's oil and gas sectors are now seeking new technologies and tools that could lead to higher productivity, increased cost efficiencies and improved business models that rely less on expensive conventional manned systems. In fact, the offshore energy survey and mapping community may be on the verge of profound disruption, similar to that brought about by "aerial drones." Next generation low-logistics / high-performance "ocean drones" are offering new options for improved productivity at lower costs, and changing old business models in the process.

KATFISH TARGETING THE UNDERWATER DEFENCE MARKET
In the defense market, there is a growing global requirement for modernization of mine countermeasures solutions. The previous generation of single-role minehunting vessels were designed and built between the 1970's - 1990's and many are now being withdrawn from service. A major drive is to replace these manned systems with multi-mission unmanned systems, such as Autonomous Underwater Vehicles (AUVs) and Unmanned Surface Vessels (USVs). While AUVs provide a valuable tool in the mine warfare toolkit, they are typically too slow (3-4 knots) to support in-stride, mine countermeasures. This leaves a growing requirement for high resolution, high speed seabed imaging platforms.

Until recently, conventional side scan sonars and multibeam echo-sounders have been the leading technology for detailed mapping and imaging of the seafloor. However, Kraken's revolutionary sonar technology called AquaPix® -- Miniature Interferometric Synthetic Aperture Sonar (MINSAS) is now available and is especially well-suited for both military and commercial seabed surveys. MINSAS delivers ultra-high seabed image resolution (3 cm), simultaneously co-registered 3D bathymetry and superior area coverage rates. This underwater technology is similar to Interferometric Synthetic Aperture Radar (InSAR) that's used for mapping the Earth's surface, but InSAS uses acoustic energy waves instead of InSAR's radio waves.

MINSAS not only delivers co-registered imagery and topography maps for very detailed site survey or infrastructure inspection (i.e. pipelines) but, using repeated surveys of the same area, enables detection of changes in seabed texture due to oil spills and even minute changes in the topography (e.g. reservoir subsidence). This repeat-pass survey technique is again analogous to the one used in InSAR to detect topographic changes such as landslides, etc. The ability of the KATFISH platform to generate centimetre-scale sonar resolution in all three dimensions can provide significant improvement in the detection, classification and identification of small seabed objects for both military and commercial seabed survey missions.

ACTIVE TOWFISH TECHNOLOGY IS SUPERIOR TO LEGACY PASSIVE TOWISH SYSTEMS
From a platform perspective, towed sonar systems have the benefit of providing high speed sonar data to operators in real-time, which is a critical feature for search and survey operations requiring earliest possible identification and classification of seabed targets. Onboard real time processing of sonar data also allows for real-time online quality monitoring of sonar data.

Passive towfish are the standard for most towed sonar surveys, however passive towfish have a number of limitations. The depth (or altitude) of a passive towfish is achieved by controlling the amount of cable payout (cable scope), and the speed of the surface vessel. A passive towfish does not have any active control surfaces or intelligent control system, therefore cannot actively control its attitude, heading, depth or altitude. The lack of active control means that a passive towfish is unable to compensate for any motion disturbances introduced by the surface ship, as a result of ship motion or environmental conditions such as sea state. This can yield insufficient platform stability to support onboard sonar and acoustic sensors.

However, actively controlled towfish provide a superior platform for seabed survey, particularly when using SAS. An actively controlled towfish can compensate for input disturbances, greatly improving the platform stability and the overall image quality. In addition, intelligently controlled active towfish can control their depth and altitude using intelligent bottom following and bottom avoidance routines.

KRAKEN'S KATFISH PROVIDES SIGNIFICANT MARKET ADVANTAGES
The actively control towfish technology being developed for the KATFISH provides a number of significant market advantages over conventional passively stable systems:

• Improved image quality
• Enables single-pass classification
• Enables higher tow speeds, which dramatically improves Area Coverage Rate
• Reduces size and deck footprint on ships of opportunity
• Lowers risk of damage through bottom following and bottom avoidance

KATFISH technology demonstrator system undergoing sea trials.

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) acoustic sensors and underwater 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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