$DPW Raises 2018 Revenue Guidance 50% from Prior Estimate

Company Raises Full Year Revenue Guidance 250% Over 2017

FREMONT, Calif., Dec. 07, 2017  — Digital Power Corporation (NYSE AMERICAN:DPW) (“Digital Power” or the “Company”), a company seeking to increase revenue through acquisitions and organic growth, stated today that it anticipates that its gross revenue for the year 2018 may increase from roughly $25M to between $36-$38M, on a consolidated basis.

The Company affirms its guidance of $4.2-$4.9M for the quarter ending December 31, 2017.

In addition, for the quarter ending December 31, 2017, Digital Power expects to report growth in comprehensive income due to significant appreciation of its marketable securities held for resale on its balance sheet.

Factors contributing to the upward revision include significant increases in orders from DPW’s defense and commercial businesses, particularly from Microphase Corporation, which received a large order from the U.S. Air Force and currently anticipates further such orders in 2018.

The Company is presently realizing improvement in all its divisions and is benefiting from synergies at Microphase Corporation and reported:

• The production for the MTIX $50M purchase order over 3 years is progressing as planned;
• Digital Power Lending, LLC believes approval of its California state lending license is imminent;
• The development of its Hospitality division is proceeding as scheduled.

Cryptocurrency Product Suite

DPW expects to leverage its 48 years of high-density, advanced power supply design, development and manufacturing experience to deliver superior systems to the burgeoning and exceptionally power-intensive cryptocurrency mining sector, as evidenced by the recent launch of Coolisys’ first crypto hardware product under the brand Super Crypto Power.

DPW is, through its subsidiary Coolisys Technologies, developing a suite of branded cryptocurrency products and services based on its world-class power solutions on both the ACIS and GPU platforms.

Balance Sheet

We expect a significant improvement to our balance sheet due to receipt of proceeds from the exercise of warrants and a reduction of liabilities from the conversion of a significant portion of our debt.

Digital Power’s attendance at 10^th Annual LD Micro Conference and its presentation on December 7, 2017 was pre-empted by the wildfires in Southern California. Moreover, the investor presentation has been deferred and its release will be announced at a later date. The Company said it appreciated the acute focus on safety and caution was appreciated by all the attendees.

About Digital Power

Headquartered in Fremont, CA, Digital Power Corporation, through its subsidiaries, 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, Coolisys Technologies, Inc., is dedicated to providing world-class technology-based solutions where innovation is the main driver for mission-critical applications and lifesaving services. Coolisys’ growth strategy targets core markets that are characterized by “high barriers to entry” and include specialized products and services not likely to be commoditized.  Coolisys, a developer and manufacturer that services the defense, aerospace, medical and industrial sectors, has three subsidiaries: Digital Power Limited, a wholly owned manufacturer based in Salisbury, UK.; Microphase Corporation, a majority owned subsidiary, with its headquarters in Shelton, CT 1-203-866-8000; and Power-Plus Technical Distributors, a wholly owned wholesale distributor based in Sonora, CA 1-800-963-0066. Digital Power Lending, LLC, is a wholly owned subsidiary of the Company, is based in Fremont, CA, and is a California private lending company dedicated to strategically providing capital to small and middle size businesses for an equity interest in addition to loan fees and interest. Excelo, LLC is a national search firm specializing in fulfilling strategic executive, professional and hi-tech placements for businesses delivering world-class services. Digital Power Corporation‘s headquarters is located at 48430 Lakeview Blvd., Fremont, California, 94538; 1-877-634-0982.

For Investor Relations inquiries: IR@digipwr.com, www.digitalpowercorp.com 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 for the remaining 2017 and thereafter from contracts and operations on a consolidated basis, that the Company and its subsidiaries will be able to complete and fulfill orders pending completion and fulfilment to the U.S. Air Force, the ability of the Company to develop or complete the manufacturing of its new product line for the digital mining community or the ability of the Company to sell digital mining power systems, the ability of the Company to earn in full the deferred revenues that may be recorded, that the Company will be able to meet its production for the MTIX product and develop a new line of accepted products and services targeting the textile marketplace. 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.