Kraken Robotics Enters into New Credit Agreement to Support Continued Growth

$45 Million of New Committed Credit Facilities

ST. JOHN'S, Newfoundland and Labrador, April 22, 2024 (GLOBE NEWSWIRE) -- Kraken Robotics Inc. (TSX-V: PNG, OTCQB: KRKNF) ("Kraken" or the "Company"), announced that it has entered into a credit agreement (the “Credit Agreement”) with The Bank of Nova Scotia (the “Lender”) for credit facilities (the “Credit Facilities”) that are expected to provide added financial flexibility to support the Company’s continued growth.

The Credit Facilities consist of: (i) a revolving 3-year term facility of up to $35 million (subject to meeting certain borrowing base requirements based on eligible receivables and inventory) (the “Revolver”); (ii) a $10 million revolving capital expenditure line of credit; (iii) a $10 million uncommitted letter of credit facility; and (iv) an uncommitted accordion facility of up to $30 million (the “Accordion”). The Credit Facilities replace in its entirety the Company’s existing credit facilities with Royal Bank of Canada which were paid out using funds drawn from the Credit Facilities effective April 19, 2024.

The Credit Facilities bear interest at bank prime interest rates plus a margin of between 1.00% and 1.75%. The Credit Facilities contain standard financial and negative covenants for a normal course operating facility and are secured by security over substantially all of the Company’s assets and are guaranteed by its material subsidiaries. Subject to credit and risk approval by the Lender at the time of any request, the Company has the ability to increase the amount that can be drawn under the Credit Facilities pursuant to the Accordion for up to an additional $30 million. The Company has no plans to draw on the Accordion at this time.

Kraken expects to use the credit facility to facilitate its long-term strategy including to further strengthen the Company’s balance sheet in anticipation of the continued growth in Kraken’s business including upcoming customer and partner decisions on additional large, new program and contract opportunities, and to fund capital expenditures, for working capital, and for general corporate purposes.

Management Comments

“We are pleased to announce the execution of our new Credit Facilities. Our ability to complete this transaction reflects the strong momentum we have experienced and the solid outlook we have for our business. With our strong EBITDA growth outlook, our capital structure can comfortably support increased debt, while still maintaining significant financial flexibility,” said Joe MacKay, Chief Financial Officer at Kraken.