Bittium Oyj - Inside information

Bittium Wireless Ltd, subsidiary of Bittium Corporation, and Finnish Defence Forces have signed a Letter of Intent for purchase of new tactical radios

Stock exchange release

Free for publication on August 8, 2017 at 3.00pm (CEST +1)

Bittium Wireless Ltd, subsidiary of Bittium Corporation, and the Finnish Defence
Forces have signed a Letter of Intent for the purchase of new software defined
radio based tactical radios

Oulu, Finland, August 8, 2017 – Bittium Wireless Ltd, subsidiary of Bittium
Corporation, and the Finnish Defence Forces have signed a Letter of Intent
concerning the purchase of new software defined radio (SDR) based tactical
radios and the preparations of the purchase. The Letter of Intent encompasses
products belonging to the new Bittium Tough SDR product family: tactical
handheld radio Bittium Tough SDR Handheld™ and tactical vehicular radio Bittium
Tough SDR Vehicular™.

The products are intended for renewing the Finnish Defence Forces’ existing
stock of field radios with modern, SDR based broadband data transfer radios to
support the reformed combat doctrine. The tactical radios are compatible with
Bittium Tactical Wireless IP Network™ (TAC WIN) SDR based system already used by
the Finnish Defence Forces.

According to the Letter of Intent, Bittium will develop the products with their
own R&D investments and the Finnish Defence Forces will support the development
work by ensuring that the products are suitable for their purposes and by making
preparations for the purchase of the products.

The Letter of Intent does not bind the parties into making a purchase agreement.
Making the purchase agreement requires that the Finnish Ministry of Defence
first authorizes the purchase, based on which Bittium and the Finnish Defence
Forces would then make a separate purchase agreement. Based on the Letter of
Intent, if materialized in full, the total value of the purchase agreement would
be approximately EUR 130 million distributed over about 10 years. The Letter of
Intent is in force until the binding purchase agreement comes into effect or
until December 31, 2019. Should the purchase materialize in full, it would have
a significant impact on Bittium’s net sales from the year 2019 onwards. The
Letter of Intent does not have an effect on Bittium’s financial outlook for the
year 2017, published on February 20, 2017 in Bittium’s Financial Statement
Bulletin 2016.

The Letter of Intent continues the long-term cooperation between the Finnish
Defence Forces and Bittium in developing the performance of the command and
control (C2) systems and the supporting software defined radio technology of the
Finnish Defence Forces.

“The Letter of Intent is based on both the government resolution on securing the
technological and industrial foundation of the Finnish defence, as well as on
the technology strategy of the Finnish Defence Forces. With the help of the
Letter of Intent the Finnish Defence Forces can advance the development of
nationally critical technologies and security of supply. In this cooperation we
can define the features of the next generation tactical radios and make sure
that we have the possibility to purchase a system that is unique in its
performance in leading the mobile troops and forming the situational awareness
on the battlefield”, says Colonel Petri Lammi, Joint Systems Centre, the Finnish
Defence Forces Logistics Command.

“We are very pleased with the trust the Finnish Defence Forces have showed us in
the form of the Letter of Intent. The Finnish Defence Forces are technologically
very advanced and demanding partner and we consider this new step in our long
-term cooperation as proof of the high quality of our competence. The new
Bittium Tough SDR tactical software defined radio based product family expands
our product offering to the market of tactical radios. With our new offering we
can serve our domestic customer even better, and at the same we will be more
competitive within the international market”, says Mr. Hannu Huttunen, CEO of
Bittium.

The Bittium Tough SDR products as subjects of the Letter of Intent and the
related R&D investments are part of Bittium’s strategic goal to expand the
product offering in tactical communications by significantly growing investments
in Bittium’s own products and solutions during 2017, as announced on November
24, 2016. Thus, the investments have been taken into account in the financial
outlook for the year 2017. According to the nature of the defense, security and
public safety markets, the investments will return profits in the long term, and
therefore Bittium plans to activate most of the R&D investments to its balance
sheet. Bittium Corporation will publish its Half Year Financial Report January
-June 2017 tomorrow, August 9, 2017.

Bittium Tough SDR™ product family

The new Bittium Tough SDR product family includes Bittium Tough SDR Handheld™,
tactical handheld radio for individual soldiers, and Bittium Tough SDR
Vehicular™, tactical radio for vehicle installations. The radios can be used to
produce and share real time situational awareness (location, image, voice,
video, and sensor data) to all levels of the organization. This improves the
performance and the effectiveness of the tactical troops, and leading the troops
is easier based on the up-to-date situational awareness and more reliable
connections.

Bittium Tough SDR products can flexibly use the most appropriate waveform with
the best fit considering the conditions and the mission, such as Bittium TAC WIN
Waveform™, ESSOR HDRWF waveform and Bittium Narrowband Waveform™. The uniquely
wide range of frequency bands improves combat usability and enables using the
same equipment in different geographical areas. Using several waveforms, even
simultaneously, improves compatibility and enables operations on different
levels and missions.

The compact-sized and cost-efficient radios are designed to endure event the
harshest conditions and they can be easily installed in different surroundings.
The devices are easy to use and they offer many options for connecting them with
other equipment. Strict information security requirements have been taken into
account when designing the Bittium Tough SDR product family and the products can
be easily tailored with national encryption algorithms.

More information on the products: www.bittium.com/BittiumToughSDRHandheld and
www.bittium.com/BittiumToughSDRVehicular.

Oulu, August 8, 2017
Hannu Huttunen
CEO

Further information:

Hannu Huttunen
CEO
Tel. +358 40 344 3507

Distribution:
Nasdaq Helsinki Ltd
Main media

Bittium

Bittium specializes in the development of reliable, secure communications and
connectivity solutions, leveraging its 30 year legacy of expertise in advanced
radio communication technologies. Bittium provides innovative products and
services, customized solutions based on its product platforms and R&D services.
Complementing its communications and connectivity solutions, Bittium offers
proven information security solutions for mobile devices and portable computers.
From November 2016 onwards, Bittium offers its customers also healthcare
technology products and services in biosignal measuring in the areas of
cardiology, neurology, rehabilitation, occupational health and sports medicine.
Net sales in 2016 was EUR 64.2 million and operating profit was EUR 2.5 million.
Bittium is listed on Nasdaq Helsinki. www.bittium.com.