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Independent Reviews for Venture Investors

PNG.V - Still water.

Kraken Sonar Inc. (PNG.V) is a marine technology company, We initiated light coverage in March 2017, with a subsequent note October 2017.

Since then, a number of releases have been issued.

Nov. 13 - Avitas Systems, a GE Venture, Partners with Kraken to Advance Subsea Robotic Inspection. Both companies will integrate Autonomous Underwater Vehicles (AUVs), acoustic and laser sensor technology and artificial intelligence-based navigation software.

Nov. 16 - Awarded $0.75M Oil & Gas contract for the development of underwater sensors and robotics. Funding to be provided by Petroleum Research Newfoundland and Labrador (PRNL), InnovateNL and industry partners.

Nov. 30 - Q3 Earnings: Revenues of $1.6M vs. $0.9M YOY. Re-invested profits to continue in 2018 (R&D + Prod Dev.) Backlog of $5M.

Dec. 18 - Stock options to employee: 1.7M shares at $0.18 cents. Can vest one or two years -one third are for the CEO and CFO.

Jan. 11 - Real time sonar have been successfully integrated and tested onboard US Navy REMUS 600 Autonomous Underwater Vehicle (AUV)

Jan. 30 - Announced winners of the Carbon Trust’s Offshore Wind Accelerator (OWA) competition. The OWA is a collaborative R&D program funded by nine leading offshore wind developers and the Scottish Government to reduce the cost of offshore wind energy.

Jan. 31 -Awarded a repeat contract valued at over $0.4M by a military customer for its AquaPix® Miniature Synthetic Aperture Sonar system. Confidential client - delivery is expected in Q2 2018.

Feb. 20 - Non-brokered private placement for up to $1.5M at $0.14 cents.

Feb. 26 -Strategic Alliance with ThayerMahan - a systems integrator specializing in maritime autonomous systems. Both companies are collaborating to deliver underwater sensors and robotics for military, law enforcement,maritime security and environmental applications.

Feb. 27 - Complete private placement of $1.5M at $0.14 cents announced Feb. 20th. Net proceeds to build inventory and working capital purposes.

Mar. 15 -Concludes successful Sea Trials of SeaVision® laser imaging system and is presenting results at Oceanology International in London.

Apr. 2 - Announces Pre-qualification of ThunderFish® for Canada’s BCIP Program. The program will grant up to $0.5M-$1M

Apr. 19 - Kraken Robotik GmbH has been accepted into the NVIDIA Inception

Apr. 24 - Appoints Dr. Jeremy Dillon As Chief Scientist.

Apr. 25 - Aligned with Canada’s Key Industrial Capabilities.

PNG.V has had some major development in the last six months. The Partnership with Avitas and ThayerMayansen are great news. So are the winning of the Carbon Trust's Offshore Wind Accelerator Competition and the acceptance in the NVIDIA Inception program.

However, contracts (O & G - $0.75M and Military $0.4M) are rather thin and smaller than the private placement ($1.5M). In addition, another round of options granted at $0.18 cents are not propelling the stock forward. Hence, PNG.V is not providing shareholders with much valuation in the past year.

At issue, PNG.V is still in the process of commercializing its product and has yet to become profitable. It will certainly be interesting to see how the company fares with the Q4 Earnings. In the Q3 report, the company stated: "We expect strong growth in Q4 and 2018 based on recently announced contracts and business development efforts". Specifically, PNG.V referred to two contracts totaling $5M dollars which were previously announced:

Sep. 7 - $3M contract with Ocean Infinity. Delivery starts Q4 2017.

Sep. 21 - Awarded $2M robotics contract. Delivery of the entire contract is expected in 2017.

Will PNG.V delivers on its Q4 Earning guidance? Will see. However, the current flat RSI, negative MACD and CMF are not very promising.

For now, PNG.V is trading on still water.

DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The content of rally is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions - rally cannot take responsibility for your investment decisions.


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