Mikros Systems Completes Recapitalization to Eliminate Preferred Stock

PRINCETON N.J., July 13, 2016 (GLOBE NEWSWIRE) ­­ Mikros Systems Corporation (OTCQB:MKRS) announced today that it has completed a recapitalization transaction to eliminate all issued and outstanding shares of preferred stock.

The Company previously had four classes of preferred stock, which were exchanged or redeemed for a combination of common stock and cash payments as follows:

Convertible Preferred Stock – $0.165 plus 1.95 shares of common stock per share Series B Preferred Stock – $0.0825 plus 2.43 shares of common stock per share Series C Preferred Stock – $2.708 plus 31.27 shares of common stock per share Series D Preferred Stock – $0.3623 cash plus 5.07 shares of common stock per share

In connection with the preferred stock exchange, Mikros also repurchased 2,084,167 issued and outstanding shares of common Stock owned by the United States Small Business Association. As a result of these transactions, the Company will make aggregate cash payments of $544,017, issue 3,089,806 additional shares of common stock, and eliminate $2,955,433 of aggregate liquidation preferences applicable to its previously outstanding shares of preferred stock. Complete details of the transactions are set forth in the Company’s Current Report on SEC Form 8­K filed with the Securities and Exchange Commission on June 17,
2016.

“These transactions have greatly simplified our capital structure and removed almost $3,000,000 of accrued dividends and liquidation preferences required to be paid prior to any distribution to holders of our common stock. We believe that the recapitalization, combined with our recent strategic corporate moves to diversify the markets and customers we serve, will accelerate the growth of our company and create long term value for our common shareholders,” said Tom Schaffnit, Mikros Director and Chairman of the Corporate Administration Committee of the Board of Directors, which negotiated the transactions.

About Mikros

Mikros Systems Corporation is an advanced technology company specializing in the research and development of electronic systems technology for military, industrial and commercial applications. Classified by the U.S. Department of Defense as a small business, its capabilities include technology management, electronic systems engineering and integration, radar systems engineering, command, control, communications, computers and intelligence systems engineering, and communications engineering. Mikros’ primary business is to pursue and obtain contracts from government and commercial customers. For more information on Mikros, please visit: www.mikrossystems.com.

Important Information about Forward ­Looking Statements

All statements in this news release other than statements of historical facts are forward­looking statements which contain our current expectations about our future results. Forward­looking statements involve numerous risks and uncertainties. We have attempted to identify any forward­looking statements by using words such as “anticipates,” “believes,” “could,” “expects,” “intends,” “may,” “should” and other similar expressions. Although we believe that the expectations reflected in all of our forward­looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Such statements are not guarantees of future performance or events and are subject to known and unknown risks and uncertainties that could cause the Company’s actual results, events or financial positions to differ materially from those included within or implied by such forward­looking statements. Such factors include, but are not limited to, changes in business conditions, a decline or redirection of the U.S. Defense budget, significant delays or reductions in appropriations for our projects, the termination of any contracts with the U.S. Government, changes in our sales strategy and product development plans, changes in the marketplace, continued services of our executive management team, our limited marketing experience, competition between us and other companies seeking SBIR grants, competitive pricing pressures, market acceptance of our products under development, delays in the development of products, our ability to adequately integrate our new software offerings into our business model, statements of assumption underlying any of the foregoing, and other factors disclosed in our annual report on Form 10­K for the year ended December 31, 2015 and other filings with the SEC. Readers are cautioned not to place undue reliance on these forward­looking statements, which speak only as of the date made. Except as required by law, we undertake no obligation to disclose any revision to these forward­ looking statements.

CONTACT: Patricia Kapp – 609‐987‐1513

Mikros Systems Corporation, 220 Commerce Drive Suite 300, Fort Washington, PA 19034 Phone 215.371.3913