Hannu Huttunen, CEO

Significant Events during 2015

The sale of the Automotive business to Continental AG  and the related changes

On May 19, Bittium Corporation announced that it will sell its Automotive business to Continental AG for a purchase price of EUR 600 million. The share purchase agreement was signed on May 18, 2015. The transaction was expected to close in the beginning of July 2015. The transaction comprised the sale of Elektrobit Automotive GmbH and its subsidiaries, including its 51 percent ownership in e.solutions GmbH, a jointly owned company between Elektrobit Automotive GmbH and Audi Electronics Venture GmbH. Simultaneously the company cancelled the ongoing demerger process, and announced it will continue to carry on its Wireless business within its existing Elektrobit Corporation (currently Bittium Corporation). The company also announced to change its name to Bittium Corporation, as the Elektrobit brand would be included as a part of the transaction. In addition the company updated its outlook for 2015 based on the assumption that the sale of the Automotive business will materialize in the beginning of July 2015.

The Extraordinary General Meeting of Bittium Corporation, which was held on June 11, 2015, approved the sale of the Automotive business to Continental AG according to Board of Director´s proposal and recommendation. The Extraordinary General Meeting also resolved to change section 1 of the Company's Articles of Association and the name of the company. The transaction was closed on July 1, 2015 as the closing conditions of the transaction, such as the approval of Bittium Corporation's Extraordinary General Meeting, receipt of the required authority approvals and other customary closing conditions were fulfilled. The purchase price of the transaction, EUR 600 million, was fully paid in cash upon the closing of the transaction.

As the transaction was closed, the name of the company was changed to Bittium Corporation, Bittium Oyj in Finnish, and the name change was registered in the trade register on July 1, 2015. The company announced that it will continue to carry on its Wireless business and will continue to be listed on Nasdaq Helsinki with its new name. Bittium's new trading code in the stock exchange is BITTI from July 2, 2015 onwards.

On July 1, Bittium updated the outlook for 2015 due to the sale of the Automotive business and the change of the company name. Outlook regarding the net sales and operating result of the continuing operations remained the same as given in the outlook given in the stock exchange release published on May 19, 2015. It was estimated that the transaction will have a non-recurring positive effect of approximately EUR 530 million on net profit and approximately EUR 575 million non-recurring positive effect on net cash flow of the Bittium group in the year 2015.

On July 1, Bittium updated its strategic guidelines and outlook for 2015 due to the sale of the Automotive business and the change of the company name. Bittium carried on its Wireless business according to the announcements made on February 19, 2015, and according to the strategic guidelines and financial targets for 2015-2017.

Changes in the management

As a result from the sale of the Automotive business, the Board of Directors of Bittium Corporation decided upon nominations and changes in the company's management. Hannu Huttunen, M.Sc. (Econ.) was appointed CEO of Bittium Corporation as of August 7, 2015. The contract of Bittium's then current CEO Jukka Harju terminated on August 6, 2015 by mutual consent, and he did not continue at Bittium after August 2015. The corporate functions and Wireless Business Segment's functions were merged and the following persons made the company's new management team: Hannu Huttunen, CEO (chairman); Veli-Pekka Paloranta, CFO; Kari Jokela, CLO; Jari Sankala, Senior Vice President, Sales; Karoliina Fyrstén, Director, Corporate Communications and Marketing, heads of product and services areas: Harri Romppainen, Vice President, Defense; Klaus Mäntysaari, Vice President, Telecom; and Sami Kotkajuuri, Vice President, Connectivity; Jari-Pekka Innanen, Vice President, Engineering and Arto Pietilä, Senior Vice President, Operations.

CFO Veli-Pekka Paloranta decided to move to another company in November 2015 and resigned from Bittium. M.Sc. (Econ.) LL.M. Pekka Kunnari was appointed as CFO of Bittium Corporation as of beginning of November 2015.

It was also decided that the Board of Directors of the Wireless Business Segment will be discontinued, since Bittium focuses on one business and there is no need for another board in addition to the Board of Directors of Bittium Corporation.

Distribution of the net proceeds from the sale of the Automotive business

On August 6, Bittium told that it plans to distribute the net proceeds from the sale of its Automotive business, a maximum of EUR 595 million, to its shareholders in the first instance by repurchasing own shares in a voluntary public tender offer directed to all shareholders of the company. The technical analyses regarding the execution of the possible public tender offer were continued and also other possible ways to carry out the distribution of funds were being evaluated simultaneously, and at that moment there was no certainty which distribution method the Board of Directors will propose to the Extraordinary General Meeting. The planned distribution of funds required preparation of separate interim accounts, after the completion of which the Board of Directors was expected to decide on the proposal to the Extraordinary General Meeting regarding the distribution method and the amount of funds to be distributed during the latter half of August 2015.

On August 24, Bittium told that it is planning to repurchase its own shares and stock options for a total purchase price of approximately EUR 595 million in a voluntary public tender offer directed to all shareholders and holders of stock options 2008C of the company. The offer would be made at market price and the consideration offered would be determined as the volume weighted average price of the share based on transactions in Nasdaq Helsinki Ltd over the five days preceding the acceptance of the offer document rounded to the nearest full euro cent. The offer would be made for a maximum of 124,747,351 shares, corresponding approximately to 94.1 per cent of all the shares in the company on the date of the release. The offer would also be made for a maximum of 252,648 stock options. The offer would be executed only for the part of the consideration payable for the shares amounting up to EUR 593,797,392.67 in the aggregate and for the stock options amounting up to EUR 1,202,607.33 in the aggregate. A shareholder or a holder of stock options would have the option to accept the offer for all the shares and/or stock options owned by him/her or for a number of shares and/or stock options of his/her choosing per each book-entry account.

On August 24, the company gave a notice to its shareholders to an Extraordinary General Meeting on the repurchase of the company's own shares and stock options 2008C entitling to shares by means of a voluntary public tender offer made to all shareholders and holders of stock options 2008C. As part of the arrangement to distribute the net proceeds from the sale of its Automotive business to its shareholders, Bittium Corporation also prepared its interim financial statements from the period of January 1 - July 1, 2015.

The Extraordinary General Meeting of BittiumCorporation, held on September 14, 2015, decided in accordance with the proposal of the Board of Directors that the company repurchases its own shares and stock options 2008C entitling to shares by means of a voluntary public tender offer made to all shareholders and holders of stock options. On September 22, the company announced that its public tender offer for own shares and stock options will commence on September 25, 2015 and expire on October 16, 2015. The offer price for a share was EUR 5.06 and for a stock option EUR 4.51. The share offer price was, in accordance with the decision of the company's Extraordinary General Meeting held on September 14, 2015, the volume weighted average price per share based on transactions in the official list of Nasdaq Helsinki Ltd during the five trading days preceding the acceptance of the offer document (between September, 15- September 21, 2015), rounded to the nearest full euro cent. The offer document, accepted by the Finnish Financial Supervisory Authority, was available from September 23, 2015 onwards on the company´s internet pages.

On October 19, 2015 Bittium announced that according to the preliminary result of the offer, the shares tendered in the offer represented approximately 73.2 percent of all the shares and votes in the company. In addition, according to the preliminary result of the offer, approximately 62.0 percent of all the stock options in the company had been tendered in the offer.

On October 21, the company announced that according to the final result of the offer, 97,244,662 shares were tendered in the offer, representing approximately 73.2 percent of all the shares and votes in the company. In addition, 166,694 stock options were tendered in the offer, representing approximately 62.0 percent of all the stock options in the company. As a result of completing the offer the cash balance and equity of the company will decrease by approximately EUR 493 million. Completing the offer did not have effect on the guidance for result of operations concerning the year 2015 previously published by the company.

On October 22, the company announced to have received a flagging announcement pursuant to chapter 9, section 5 of the Finnish Securities Market Act, according to which the holdings of Kai Hildén in Bittium will decrease below the threshold of 5 percent of the voting rights and total number of shares of the company.

On October 22, the company announced to have received a flagging announcement pursuant to chapter 9, section 5 of the Finnish Securities Market Act, according to which the holdings of Eero Halonen in Bittium will decrease below the threshold of 5 percent of the voting rights and total number of shares of the company.

On October 22, the company announced to have received a flagging announcement pursuant to chapter 9, section 5 of the Finnish Securities Market Act, according to which the holdings of Erkki Veikkolainen in Bittium will decrease below the threshold of 5 percent of the voting rights and total number of shares of the company.

On October 22, the company announced to have received a flagging announcement pursuant to chapter 9, section 5 of the Finnish Securities Market Act, according to which the holdings of Juha Hulkko in Bittium will decrease below the threshold of 5 percent of the voting rights and total number of shares of the company.

On October 27, the company announced to have cancelled its own shares and stock options 2008C as a result of the completion of a voluntary public tender offer for the company's own shares and stock options. In accordance with the terms and conditions of the offer, the shares and stock options transferred in the offer became null and void as part of the settlement of the completion trades of the offer. As a result of the shares and stock options becoming null and void, the number of company's remaining shares was 35,578,835, and the number of company's all remaining stock options was 102,300. Settlement of 5,467 shares to be transferred in the offer was not completed within the same timetable as the settlement of the other shares transferred, and such shares had not yet become null and void.

On October 28, the company announced that as the voluntary public tender offer for its own shares and stock options 2008C, decided by the Extraordinary General Meeting of the company on September 14, 2015, resulted in changes in the ownership of the company, the company published the changes with regards to its ten largest shareholders resulting from completing the offer.

On October 28, the company announced to have received a flagging announcement pursuant to chapter 9, section 5 of the Finnish Securities Market Act, according to which the holdings of Jukka Harju in Bittium will decrease below the threshold of 5 percent of the voting rights and total number of shares of the company.

On November 4, the company announced to have cancelled 5,467 of its own shares transferred in the offer, that didn't became null and void on October 27, 2015 in connection with the completion of the offer. After these shares became null and void, the number of company's remaining shares was 35,598,368, and as of November 4, the number of company's all remaining stock options was 102,300.

Stock Options

A total of 1,351,686 new shares in Bittium Corporation were subscribed between December 15, 2014 and November 30, 2015 by virtue of the option rights 2008B and 2008C. The share subscription price, EUR 823,438.10 was recorded in the company's invested non-restricted equity fund. The corresponding increases in the number of the company's shares were entered into the Finnish Trade Register on February 6, April 14, June 24, September 1, October 29,and December 11, 2015. Shareholder rights by virtue of the new shares commenced as of the abovementioned registration entry dates. Trading with the newly registered shares started on February 9, April 15, June 25, September 2, October 30 and December 14 as an additional lot of Bittium Corporation's shares in Nasdaq Helsinki Ltd. On December 31, 2015, after the registration of the new shares, and cancellation of the shares acquired through the voluntary public tender offer, the number of shares in Bittium Corporation's totaled to 35,600,168..

Other significant events

On January 2 a subsidiary of Bittium Corporation acquired 100 per cent of the shares of Birdstep Technology Oy, which was a fully owned Finnish subsidiary of Birdstep Technology ASA, based in Norway. The acquired company´s SafeMove business provides its customers high quality information security solutions for mobile devices and portable computers. The acquisition strengthened the competitiveness of Bittium as a provider of secure communication solutions for defense, safety and other authorities markets. Birdstep Technology Oy's (currently Bittium Safemove Ltd) net sales was EUR 2.5 million in 2013 and EUR 2.9 million in 2014. At the time of the acquirement, the company employed 19 persons located in Espoo, Finland. The debt free cash purchase price was EUR 1.8 million. The acquisition had no significant impact on Bittium´s balance sheet, net sales and financial position.

The Board of Directors of Bittium Corporation approved on February 18, 2015 a plan for partial demerger of the company and the listing of the new Bittium Corporation as a separate entity at Nasdaq Helsinki. Simultaneously the Board of Directors updated the strategic guidelines and financial targets for the years 2015 -2017. Based on the demerger plan, the assets and liabilities related to then Elektrobit Corporation's Wireless Business Segment would have been transferred to Bittium Corporation, a new entity that would have been listed at Nasdaq Helsinki. The Automotive Business Segment would have remained as a part of the then Elektrobit Corporation, which would have continued its listing at Nasdaq Helsinki. The partial demerger would have been set for an approval by an extraordinary general meeting, which was planned to be held on June 11, 2015. The planned effective date for the demerger would have been June 30, 2015. The partial demerger process was cancelled on May 19, 2015 as the company announced its plan to sell the Automotive business to Continental AG.

On April 29, a notice was given to the shareholders of Bittium Corporation to an Extraordinary General Meeting that was planned to be held on June 11, 2015.

On May 2, Bittium Corporation announced that its subsidiary Bittium Wireless Ltd and the Ministry of Mexican Communication and Transportation (Secreteria de Comunicaciones y Transportes, SCT) had signed an agreement regarding the development of three types of Android-based L-band mobile devices for the SCT's MEXSAT program. These mobile devices will be based on Bittium's Specialized Device Platform, a customized customized Android-based platform designed especially for public safety and cyber security markets. The value of this development agreement was approximately USD 21.9 million (approximately EUR 19.5 million as per exchange rate of April 30, 2015). More than half of the contract value is expected to be recognized as revenue during 2016.

On September 14, the Extraordinary GeneralMeeting that was convened to decide upon the voluntary public tender offer, decided also on the election of new members of the Board of Directors. Kirsi Komi, Juha Putkiranta and Seppo Mäkinen were elected as new members of the Board of Directors for a term commencing on November 5, 2015 and continuing until the close of the next Annual General Meeting. The new members of the Board of Directors replaced the previous members of the Board of Directors Jorma Halonen, Juha Hulkko and Seppo Laine, who had notified that they will leave the Board of Directors when the term of the new members commences.

On November 5, Bittium Corporation's new Board of Directors commenced its term that will continue until the close of the next Annual General Meeting. In the assembly meeting on the same day, the Board of Directors elected Erkki Veikkolainen as the Chairman of the Board. Further, the Board of Directors resolved to elect Staffan Simberg (Chairman of the committee) and Kirsi Komi as members of the Audit and Financial Committee and to invite to the Audit and Financial Committee the former Chairman of the Board of Directors Seppo Laine as the external advisor of the Board of Directors.

On December 7, Bittium announced to have received a purchase order from the Finnish Defence Forces for the Bittium Tactical Wireless IP Network™ (TAC WIN) system products, which are meant for tactical communications. The value of the received purchase order was EUR 5.1 million (excl. VAT). The order had no significant impact on Bittium's net sales, operating result or financial standing, and it did not change Bittium's financial outlook for the year 2015, published on November 5, 2015 in the Interim Report January-September 2015.

On December 23, Bittium Technologies Ltd and NCC Rakennus Oy signed a contract to build new facilities for Bittium in Oulu, Finland. The agreement is a design and construct contract in nature and the cost will be approximately EUR 13 million. The new facilities will be ready for use by the end of 2017 and will consist of approximately 8,600 square meters. It will be located at the intersection of Ritaharjuntie and Tietolinja in Oulu. The total cost of the project is approximately EUR 15 million including land property and fittings. The project will be financed from the company's existing financing structure as the project moves forward. The company expects to streamline its operations and save costs from 2018 onwards once the project has been completed.