Warrants Exercised and Announcement of Non-Brokered Private Placement
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ST. JOHN’S, Newfoundland, Feb. 20, 2018 (GLOBE NEWSWIRE) -- Kraken Robotics Inc. (TSX-V:PNG) (OTCQB:KRKNF)
(“Kraken” or the “Company”), is pleased to announce that it is undertaking a non-brokered private placement offering for aggregate
gross proceeds of up to CDN$1.5 million (the “Offering”).
Pursuant to the Offering, the Company may issue an aggregate of up to 10,714,285 common shares (the “Shares”) at
a price of CDN$0.14 per Share. There are no warrants being issued as part of this offering. All shares issued under the Offering
will be subject to a four month hold period from the closing date under applicable Canadian securities laws, in addition to such
other restrictions as may apply under applicable securities laws of jurisdictions outside Canada.
The closing of the Offering is expected to occur on or about February 26, 2018 and remains subject to receipt of
all necessary regulatory approvals including acceptance for filing by the TSX Venture Exchange. The Company intends to use the net
proceeds of the Offering to build inventory for customer trials and general corporate and working capital purposes. A finder’s fee
may be paid by the Company through the issuance of finder shares in an amount equal to 6% of the Shares placed with subscribers
introduced by any finder under the Offering.
Management Comments
“The recent exercise of warrants, an equity private placement, and a new short-term loan from RBC provide funding to build
additional inventory for customer evaluations and improve our working capital. In addition, we expect that the investors in this
financing will have a positive, long-term view of the Company,” said Karl Kenny, President and CEO of Kraken. “Revenues from our
core sensor and systems products continue to gain traction in both military and commercial applications.”
Warrant Exercise Update
Kraken had 14,063,326 warrants, each exercisable into one common share at CDN$0.15 per share with an expiry of February 18, 2018. A
total of 2,888,408 of these warrants were exercised resulting in proceeds of CDN$419,761. Of this amount, CDN$100,000 was received
in 2017 through early exercise of warrants. The remaining 11,174,918 warrants were not exercised and have expired.
Escrow Release & Current Capital Structure
As part of Kraken’s original RTO transaction in February 2015, approximately 51 million shares were held in escrow and released
from escrow every six months over three years. The final escrow release of 7,647,108 occurred as of February 18, 2018. Of this
final release, Karl Kenny and Elizabeth Hayden-Kenny accounted for 6,776,633 shares or approximately 90% of the escrowed shares.
Mr. Kenny and Ms. Hayden-Kenny control more than 35 million Kraken shares and are focused on the long-term fundamentals and growth
of Kraken’s business.
“While the final escrow release has been a topic of external discussion, both Ms. Hayden-Kenny and I account for
almost 90% of the last escrow release and are committed long term shareholders. Ms. Hayden-Kenny also intends to acquire more than
700,000 shares in the above noted financing, reiterating her positive view towards Kraken,” said Mr. Kenny.
$750,000 Term Loan with RBC
On Monday, February 19, 2018, the Royal Bank of Canada approved a CDN$750,000 non-revolving term facility for Kraken Robotics. The
loan bears interest at prime plus 2.1% and is repayable in full on June 30, 2018. Borrowings under this facility shall be used to
finance eligible pre-shipment costs in connection with an export contract to a European defense customer. Kraken will prepay
borrowings under this facility with amounts equal to any advance or partial repayments received by Kraken from this specific
customer contract. Kraken is pleased to receive this short-term loan from RBC which is being used to pay for materials used to
satisfy the large customer contract.
Renewal of Sophic Capital Investor Relations Agreement
Kraken has renewed its investor relations services agreement between the Company and Sophic Capital. Sophic will receive monthly
fees of CDN$7,000. In addition, the Company has granted to Sophic options to purchase up to 450,000 common shares of the Company,
exercisable at a price of CDN$0.185 per share for three years and will vest in equal quarterly installments over one-year. The
agreement has a one-year term, which can be extended upon the written consent of both the Company and Sophic. The renewal of
Sophic, and the grant of Options, is subject to the approval of the TSX Venture Exchange.
About Kraken Robotics Inc.
Kraken Robotics Inc. (TSX.V:PNG) (OTCQB:KRKNF) is a marine technology company dedicated to the production and
sale of software-centric sensors and underwater robotic systems. The company is headquartered in St. John’s, Newfoundland with
offices in Dartmouth, Nova Scotia; Bremen, Germany; and Fairfax, Virginia. For more information, please visit
www.krakenrobotics.com, www.krakenrobotik.de, www.krakenpower.de. Find us on social media on Twitter (@krakenrobotics), Facebook
(@krakenroboticsinc), and LinkedIn.
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, and the OTCQB has
neither approved nor disapproved the contents of this press release.
For further information, please contact:
Sean Peasgood, Investor Relations
(416) 565-2805
sean@sophiccapital.com
Greg Reid, Chief Financial Officer
(416) 818-9822
greid@krakenrobotics.com
Glenda Leyte, Marketing Manager
(709) 757-5757 extension 288
gleyte@krakenrobotics.com
