Changes in the Company´s Management and Organizational Structure
On April 27, 2016 Bittium announced following appointments in the company´s management group:
M.Sc. Sami Kotkajuuri (b. 1967) was appointed as Vice President, Business Development as of May 1, 2016. Kotkajuuri has been working at Bittium since 2009. As his latest task, he was responsible for the IoT (Internet of Things) Solutions product and service area, where Bittium offers R&D services and customized solutions for companies needing wireless connectivity for their devices. Kotkajuuri continued as a member of the company´s management group reporting to Hannu Huttunen, CEO.
M.Sc. Klaus Mäntysaari (b. 1966) was appointed as Vice President, Connectivity Solutions as of May 1, 2016. Mäntysaari has been working at Bittium since 2004. Previously he was responsible for Telecom product and service area, where Bittium offers R&D services for wireless telecommunication market. Mäntysaari continued as a member of the company´s management group reporting to Hannu Huttunen, CEO.
The Board of Directors of Bittium Corporation decided on changes in the company´s organizational structure and management group to support the company´s updated strategy that was announced on November 24, 2016. According to its strategy Bittium´s business focuses on three product and service areas: Defense & Security, Connectivity Solutions and Medical Technologies.
Mr. Jari Sankala (M.Sc. Electrical Engineering, Digital Communications) was appointed as Senior Vice President, Defense & Security product and service area. Mr. Sankala has been working at Bittium since 2011 and transfers to his new position from the head of sales. In Bittium´s new organizational structure, the sales operations are managed by the product and service areas. Mr. Klaus Mäntysaari (M.Sc.) continued as Vice President, Connectivity Solutions product and service area. He has been working at Bittium since 2004. Mr. Arto Pietilä M.Sc. (Applied Electronics) was appointed as Senior Vice President, Medical Technologies product and service area. Mr. Pietilä has been working at Bittium since 2001, among others as head of operations, head of Contract R&D business and as head of Wireless Solutions business. Prior to Bittium, Mr. Pietilä acted as the Managing Director of Polar Electro Oy.
Mr. Sami Kotkajuuri, head of business development, decided to move on to new challenges outside of Bittium and resigned from the company´s service. Mr. Kotkajuuri continued his duties until the end of the year 2016.
As of December 1, 2016 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, heads of product and service areas: Mr. Jari Sankala, Mr. Klaus Mäntysaari, and Mr. Arto Pietilä; and Mr. Jari-Pekka Innanen, Vice President, Engineering.
Directed Share Issue without Consideration 2016
The Board of Directors of Bittium Corporation decided on March 22, 2016 on a directed share issue without consideration as reward payments to the key persons of the company. In the share issue a maximum of 58,000 new shares was issued without consideration to the key persons entitled to share rewards according to the terms and conditions relating to the share rewards. A total of 9 people belonging to the management and personnel of the company were in the target group of the payment. Of the maximum of 58,000 shares offered in the share issue, 37,500 shares were subscribed. The 37,500 shares issued in the share issue were registered with the Trade Register and registered on the book-entry accounts of the recipients of the shares on March 24, 2016 and became subject to trading on the trading list of Nasdaq Helsinki on March 29, 2016. After the registration of the new shares, the number of shares in Bittium Corporation totaled to 35,693,166.
A total of 55,498 new shares in Bittium Corporation were subscribed for between December 1, 2015 and March 31, 2016 by virtue of the option rights 2008C. The share subscription price, EUR 30,523.90 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 10, 2016 and April 14, 2016. Shareholder rights by virtue of the new shares commenced as of the abovementioned registration entry date. Trading with the newly registered shares started on February 11, 2016 and April 15, 2016 as an additional lot of Bittium Corporation´s shares in Nasdaq Helsinki Ltd. The share subscription period for stock options 2008C ended on March 31, 2016.
Reduction of Significant Customer Relationship
On October 5, 2016 Bittium announced to have received information according to which significant customer cooperation with a global network equipment manufacturer will reduce during 2017. According to the information received, if the planned actions of the customer will materialize in full, these actions might have a negative effect to Bittium´s net sales and operating result in 2017. The reduction of the cooperation had no effect on the Bittium´s outlook for the year 2016.
In November 2016, Bittium acquired the ownership in Mega Electronics Ltd and MegaKoto Ltd specialized in healthcare technology. Mega Electronics Ltd was acquired by purchasing 100 percent of the shares in Remega Ltd. Mega Electronics Ltd was a fully owned subsidiary of Remega Ltd. Mega Electronics Ltd owned 28.2 percent of the shares in MegaKoto Ltd, a company specialized in healthcare services, and had signed binding share purchase agreements to acquire 100 percent of the shares in MegaKoto Ltd. The acquisition of the shares in MegaKoto Ltd was completed as planned.
Mega Electronics Ltd (now Bittium Biosignals Ltd), founded in 1983, is a Finnish ISO13485 certified medical device manufacturing company. The company is specialized in biosignal measuring for cardiology, neurology, rehabilitation, occupational health and sports medicine. MegaKoto Ltd (now Bittium Medanalytics Ltd) provides comprehensive arrhythmia monitoring services for its customers such as primary care centers, private clinics and hospitals.
The pro forma net sales of Remega group and MegaKoto Ltd was approximately EUR 3.1 million in 2015 and pro forma operating profit was approximately EUR 0.2 million. According to the preliminary and unaudited accounts, the pro forma net sales of the acquired companies in January-October 2016 was EUR 3.0 million and pro forma operating profit EUR 0.4 million. The net sales in January-October 2016 grew by 58 percent compared to corresponding period in 2015. The companies employ altogether 28 persons and are located in Kuopio, Finland.
The debt free cash purchase price of the share acquisition, including the purchase price of MegaKoto shares, was EUR 8.0 million, which was adjusted based on the level of cash, debt and networking capital of the acquired companies as of completion of the acquisition. In addition to the aforementioned purchase price, an additional purchase price, capped at EUR 1.0 million, is payable upon the achievement of certain financial performance targets for the acquired business between January 1, 2017 and December 31, 2018. The potential additional purchase price will be paid in cash after achieving the goals. The acquisition had no significant impact on Bittium´s balance sheet, operating result and financial position, and it didn´t have an effect on Bittium´s financial outlook for the year 2016 published on November 3, 2016 in the Interim Report January-September 2016. Remega group and MegaKoto Ltd has been reported as part of Bittium Corporation from the time of acquisition onwards.
With this acquisition Bittium got the ownership of Faros product family, focused on remote heart monitoring, NeurOne product focusing on measuring the electrical activity of brain, and BrainStatus, a disposable quick analysis headband used in emergency and intensive primary care to diagnose for example epileptic seizures and brain stroke, and other healthcare technology products. Faros devices are EU medical device directive class CE class IIa and USA FDA 510(k) registered medical devices. MegaKoto Ltd is a private provider of healthcare services approved by the Finnish National Supervisory Authority for Welfare and Health having more than 70 health centers and private clinics using its heart monitoring Kardiolog.fi service.
Bittium has over 30 years of experience in mobile radio technology and the acquisition today expands its technology competence to healthcare technology, where mobile solutions are being increasingly used in patient monitoring. The products and services of Mega Electronics and MegaKoto and their strong experience in biosignal measurement technology strengthens Bittium´s offering for these markets. Bittium is now able to provide for the healthcare market global leading advanced solutions for patient care both in the hospitals as well as in home care.