Report By the Board of Directors

Significant Events after the Reporting Period

Acquisition of the SafeMove business On January 2, 2015

Elektrobit Technologies Ltd, a subsidiary of Elektrobit 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 acquisition strengthened the competitiveness of EBīs Wireless Business Segment as a provider of secure communication solutions for defense, safety and other authorities markets. Birdstep Technology Oy provides its customers high quality information security solutions for mobile devices and portable computers. Birdstep Technology Oy's (SafeMove Oy from 2nd of January 2015 onwards) net sales was EUR 2.5 million in 2013 and in January-September 2014 EUR 2.1 million. The company employs 19 persons located in Espoo, Finland. The debt free cash purchase price is EUR 2.0 million, which will be adjusted based upon the level of networking capital and cash and debt in the Birdstep Technology Oy on December 31, 2014. The acquisition has no significant impact on EBīs balance sheet, net sales and financial position. The company will be reported as part of EBīs Wireless Business Segment from January 1, 2015 on.

Parrot S.A.'s request for arbitration against

In January 2015 EB received information that Parrot filed a request for arbitration against at the International Court of Arbitration of the International Chamber of Commerce seeking remuneration and/or damages currently in an amount of approximately EUR 9.4 million in connection with an automotive supply contract. The place of arbitration is Munich, Germany. Based on e.solutionsī initial legal analysis the claim is without merit both in terms of the grounds and the amount of the claim. The claim is based on Parrot S.A.'s allegation that GmbH breached a supply contract between GmbH and Parrot S.A. by not ordering Parrot S.A.'s products for GmbHīs new infotainment software system. Parrot S.A., also, claims that GmbH's new infotainment software system infringes its IP rights. Based on the current analysis, the arbitral proceedings will not cause any financial obligation to or to EB that would affect EBīs profit outlook and financial position. It is possible that, based on later information, this view may need to be reconsidered. At worst, Parrot's claim could have significant negative impact on' and EB's profit, cash flow and financial position.

Increase of shares by virtue of the option rights 2008B and 2008C

A total of 508,697 new shares in Elektrobit Corporation were subscribed between December 15, 2014 and January 26, 2015 by virtue of the option rights 2008B and 2008C. The share subscription price, EUR 61,719.94, was recorded in the Company's invested non-restricted equity fund. The corresponding increase in the number of the Company's shares was entered into the Finnish Trade Register on February 6, 2015. Trading with the newly registered shares started on February 9, 2015 in NASDAQ OMX Helsinki Ltd. After the registration of the new shares, the number of shares in Elektrobit Corporation totals 131,588,510.