Digital Power Corporation Issues End of Quarter Investor Update

Customer Order Backlog Increases to Over $65 Million

Company Begins to Process MTIX Order, Deliveries Scheduled for 2017

FREMONT, Calif., June 30, 2017 -- Digital Power Corporation (NYSE MKT:DPW) ("Digital Power" or the "Company"), a growth company seeking to increase revenues through acquisitions and organic growth, today announced that is customer order backlog has increased to over $65M, an increase of $8M from the prior update issued by the Company on May 17, 2017. The increase was attributed to organic growth from new and current customers of DPW and the consolidation of financial reporting which now includes Microphase Corporation.

Amos Kohn, the Company’s President and Chief Executive Officer, stated, “We continue to see strength in our custom power supply business as our order book grows. With the purchase of Microphase Corporation, we will also see strong cost savings which will increase our gross and net margins. We are very excited about our continuing prospects to reduce costs while expanding production across the enterprise.”

The Company reported that it has received from its customer, MTIX, Ltd., order instructions with production schedules and specifications which have launched the formal production process for the machines that utilize MTIX’s proprietary technology. On March 15, 2017, the Company announced it had been awarded a 3-year, $50 million purchase order by MTIX Ltd., headquartered in Huddersfield, West Yorkshire, U.K., to manufacture, install and service textile treatment systems that utilize MTIX’s proprietary Multiplexed Laser Surface Enhancement (MLSE™) system. The Company confirmed that though production planning and scheduling had been underway, these tasks are now being driven to completion. The Company is fully engaged to incorporate the customer’s final specifications and schedules into the production cycle and implement, execute and manage all aspects of this new revenue stream. The Company disclosed that invoicing for the initial deposits necessary to launch production total $1.5MM and anticipate additional invoicing to support the escalation of production over the coming weeks. The Company stated that revenue from the production of the MLSE machines will be recognized in fiscal 2017 and should measurably impact both the gross and net profitability for the Company.

Regarding the progress made in production with MTIX, Ltd., Mr. Kohn said, “The execution of the general contract with MTIX, Ltd. has resulted in a positive material change to the future prospects of the Company. The added value to shareholders is yet to be understood. Over the coming years, this contract and relationship we believe will provide massive value to our shareholders.”

About Digital Power

Headquartered in Fremont, CA, Digital Power Corporation designs, manufactures and sells high-grade customized and off-the-shelf power system solutions. Our products are used in the most demanding communications, industrial, medical and military applications where customers demand high density, high efficiency and ruggedized power solutions. The Company’s wholly owned subsidiary, Digital Power Limited which does business as Gresham Power Electronics, is based in Salisbury, UK. The Company’s majority owned subsidiary, Microphase Corporation has its headquarters at 100 Trap Falls Road Ext., Shelton, CT 06484-4655; (203) 866-8000. Website: www.microphase.com. Digital Power's headquarters is located at 48430 Lakeview Blvd., Fremont, California, 94538; 1-877-634-0982. Website: www.digipwr.com.

For Investor Relations inquiries: [email protected] or 1-888-753-2235.

Forward Looking Statements

The foregoing release contains “forward looking statements” regarding future events or results within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements concerning the Company’s current expectations regarding revenues from contracts and operations on a consolidated basis. The Company cautions readers that such “forward looking statements” are, in fact, predictions that are subject to risks and uncertainties and that actual events or results may differ materially from those anticipated events or results expressed or implied by such forward-looking statements. The Company disclaims any current intention to update its “forward looking statements,” and the estimates and assumptions within them, at any time or for any reason. More information about potential risk factors that could affect the Company’s business and financial results are included in the Company’s most recent filings with the U.S. Securities and Exchange Commission, including, but not limited to, the Company’s Forms 10-K, 10-Q and 8-K. All filings are available on the Company’s website at www.digipwr.com.