Significant Events During the Reporting Period
February 13, 2018 Bittium Biosignals Ltd, a subsidiary of Bittium Corporation, and a major US remote monitoring provider, concluded a three-year supply agreement under which Bittium will supply the Bittium Faros 360 and customized Bittium Faros 360 cardiac ECG signal measuring and monitoring devices. In addition, Bittium will supply disposable electrodes for attaching Bittium Faros ECG devices.
When materialized in full, the total value of the agreement was USD 21 million (approximately EUR 17.1 million based on an exchange rate of February 12, 2018) with revenues recognized gradually during the years 2018, 2019, 2020 and 2021 depending on the progress of the product deliveries, with estimated emphasis on 2019 and 2020. This agreement did not change the Company´s long term financial outlook (published in the Half Year Financial Report JanuaryJune 2017 on August 8, 2018).
April 13, 2018 Bittium Wireless Ltd, a subsidiary of Bittium Corporation received a purchase order from the Finnish Defence Forces for products included in the Software Defined Radio based Bittium Tactical Wireless IP Network (TAC WIN) system, which is meant for tactical communications. The value of the purchase order was EUR 14.3 million (excl. VAT). The purchase order did not change Bittium´s financial outlook for the year 2018 (published in the Financial Statement Bulletin 2017 on February 22, 2018). The purchase order is based on the framework agreement signed by Bittium and the Finnish Defence Forces on August 9, 2017, according to which the Finnish Defence Forces will order products included in the Software Defined Radio based Bittium TAC WIN system during the years 20182020. According to the framework agreement, Finnish Defence Forces will issue separate purchase orders for the products each year. The products ordered now will be delivered to the Finnish Defence Forces during the year 2018. If materialized in full, the total value of the framework agreement is EUR 30 million (excl. VAT). Bittium announced the Frame Agreement on August 9, 2017.
September 11, 2018 Mr. Sammy Loitto (MBA and Master of Engineering in Industrial Management) was appointed as Senior Vice President, Sales in Bittium Corporation as of October 1, 2018. Previously he has been responsible for sales and business development activities at Bittium. Prior to that, he has worked in several sales and management positions at Jolla, Gryphon Secure and Airbus. Mr. Loitto reports to Mr. Hannu Huttunen, CEO of Bittium Corporation. As of October 1, 2018 Bittium management group consists of following persons: Mr. Hannu Huttunen, CEO (chairman); Mr. Pekka Kunnari, CFO; Mr. Kari Jokela, CLO; Ms. Karoliina Fyrstén, Director, Corporate Communications and Marketing, Mr. Sammy Loitto, Senior Vice President Sales, and heads of product and service areas: Mr. Jari Sankala, Senior Vice President, Defense and Security; Mr. Klaus Mäntysaari, Senior Vice President, Connectivity Solutions; and Mr. Arto Pietilä, Senior Vice President, Medical Technologies; and Mr. Jari-Pekka Innanen, Vice President, Engineering.
October 3, 2018 The Finnish Minister of Defence Jussi Niinistö has authorized the Finnish Defence Forces Logistics Command to enter into a framework agreement with Bittium Wireless Ltd on the purchase of Bittium Tough Comnode terminals and related accessories. The framework agreement was signed on November 11, 2018. It covers the years 2018-2020 and the maximum value of the purchase authorization for the framework agreement is EUR 8.3 million (excl. VAT). Based on the framework agreement, the Finnish Defence Forces will issue separate purchase orders in several batches during the validity of the framework agreement. The framework agreement did not change Bittium´s financial outlook for the year 2018. Bittium Tough Comnode will fulfill the data transfer needs of the Finnish Defence Forces´ mobile troops by functioning for example as a VoIP phone (Voice over IP), an IP router (Internet Protocol), and an SHDSL repeater (Symmetrical High-speed Digital Subscriber Line). The terminals will be used by all three military branches.
November 23, 2018 Bittium announced that its cooperation partner, Austrian information technology company Kapsch BusinessCom AG was informed by the Austrian defense administration (Bundesministerium für Landesverteidigung BMVL) that it should be selected as the provider of the new IP-based tactical communication system for the Austrian Armed Forces in case no appeals by the losing parties of the competitive bidding will be filed during the next 10-days appeal period. This is a typical process in such public competitive bidding. Bittium´s products for tactical communications are a significant part of Kapsch BusinessCom´s winning bid, including the Software Defined Radio based Bittium Tactical Wireless IP Network (TAC WIN) system, which will be the core of the new communication system, as well as Bittium Tough Comnode and Bittium Tough VoIP products. On December 4, 2018 Bittium announced to have been informed that the 10-days appeal period has expired and no appeals have been filed. The signing of the contract was scheduled to December 2018. If materialized, Bittium´s share of the total value of the winning bid will be around EUR 30 million (excl. VAT). The product deliveries are expected to take place during the years 2019-2021 and the majority of the net sales is estimated to realize during the years 2020 and 2021. This did not change Bittium´s financial outlook for the year 2018.
December 11, 2018 The Finnish Minister of Defence Jussi Niinistö authorized the Finnish Defence Forces Logistics Command to enter into an Agreement with Bittium Wireless Ltd on the purchase of Bittium Tough SDR handheld and vehicle radios, and their related accessories. The Agreement was signed on December 12, 2018. The value of the Purchase Agreement is approximately EUR 10.5 million (excl. VAT) at the maximum. The new software-defined-radio based tactical radios will be used at the first phase by the Army and the delivery will be completed at the latest by the end of the year 2020. This purchase agreement did not change Bittium Corporation´s financial outlook for the year 2018. The Purchase Agreement is based on the Letter of Intent for purchase of new tactical radios, signed by Bittium and Finnish Defence Forces on August 8, 2017. The Purchase Agreement is a natural continuum to the Letter of Intent. Bittium issued a stock exchange release on the Letter of Intent on August 8, 2017.
The purchase agreement includes terms for optional additional purchase, according to which, the Finnish Defence Forces have an option to purchase additional tactical radios and their related accessories, training and system management for the use of Army, Air Force and Navy, based on the prices agreed in the Purchase Agreement. If these optional additional purchase amounts would materialize in full, the total value of the purchase would be approximately EUR 207 million (excl. VAT) at the maximum. As agreed in the Letter of Intent, the Finnish Defence Forces aim at making these additional purchases during the next ten years. The materialization of the purchase is affected by the yearly state budget allocations for the administrative of the Ministry of Defence. There will be separate purchase orders for these optional additional purchases.