Bercman Technologies
Company Announcement

AS Bercman Technologies 2022 first half-year unaudited consolidated interim report and estimation revision

Management report 

Introduction 
 
AS Bercman Technologies’ (hereinafter “Bercman”) consolidated unaudited sales revenue of the first half of 2022 was 793 435 euros. For the comparable period in 2021, turnover was EUR 3115. A significant part of the increase in turnover is due to the fact that the results of Krakul OÜ, a subsidiary of Bercman, are reflected in the consolidated results of the Bercman group starting from this year.

New markets and expansion in existing markets

In the first half of the year, a new generation of smart pedestrian crosswalks were installed in the Tehnopol and Ülemiste campuses in Tallinn, in Haapsalu, Kuressaare, Saue and Viimsi. In addition, the procurement was won for the installation of smart pedestrian crossings in Narva-Jõesuu (installation to take place in Q3). Smart pedestrian crosswalks were delivered to foreign markets in Greece, Switzerland and Lithuania. 

At the beginning of 2022, the procurement of the Põlva Smart Road was won for the construction of a 2.5 km road section with 14 smart crosswalks and the ability to measure average speed in the city of Põlva. The procurement was cancelled due to an error on the part of the organiser and a re-procurement was carried out. Bercman's joint bid with Krakul was declared the winner by the contracting authority (Stock market news 10.08.2022 AS Bercman Technologies won the procurement of Põlva Smart Road for the second time), the contract isn’t signed yet. 

In the first half of the year, Krakul continued to work with long-term customers and customer projects. In the second quarter, Krakul signed a partnership agreement with u-blox, the world's leading provider of positioning and wireless technologies and services. The partnership means that u-blox can confidently introduce customers who need solutions to fit their specific needs to the Krakul team. IoT and autonomous systems solutions were exported to the Finnish, Latvian, Singaporean, Swiss, German and US markets in the first half of the year. 

Research and development

In the period from February to April, company participated in a project coordinated by the autonomous driving lab of the University of Tartu together with Tartu City Transport, Traffest OÜ and Modern Mobility OÜ. The aim of the cooperation project was to test the use of a autonomous driving vehicle in the provision of on-demand transport services and to validate the technological solutions and processes necessary for this purpose. Within the framework of the cooperation project, Bercman installed radars on the trajectory of an autonomous vehicle in the city of Tartu and outside the city on the highway and interfaced them with the control system of an autonomous car. In addition to radars, Estonia's first smart pedestrian crosswalk with 5G connection was interfaced to the vehicle control system on Kroonuaia Street in Tartu. Participation in the project allowed the testing of technologies needed for the safe movement of self-driving vehicles on urban streets and roads. The results of the test project are expected to have a positive impact on the further development of on-demand transport services via self-driving vehicles and thereby increase the demand for self-driving vehicles interacting with transport infrastructure.

The company participates in a cooperation project with the University of Hamburg and the technology companies NATIX GmbH, HITeC e.V. and Artificial Intelligence Center Hamburg (ARIC). Preparatory work was carried out during the reporting period for the implementation of the development project “SmartWalk” financed by the German Ministry of Transport and Infrastructure.  The project received a funding of 100 000 euros under the mFUND Innovation Initiative. In the course of the project, a smart pedestrian crosswalk was installed along with additional technical equipment from the project partner Natix GmbH using innovative AI technologies on the Lammi road in Tartu. Using a real-time anonymised combination of sensors, "SmartWalk" detects critical traffic situations and alerts road users.

In the second quarter, the company was accepted as a partner of the Swedish innovation programme Drive Sweden. Drive Sweden is made up of about 150 organisations in various fields working together on every aspect of the future transport revolution, from road safety and legislation to business models, technology and infrastructure. For Drive Sweden's partners, participation in the partnership projects allows them to test the ideas and technologies they have developed to solve transport problems in real life. 

In the second quarter, the company applied for funding from the EAS Applied Research Programme (RUP) with a budget of 340 000 euros. The aim of the project is to create a prototype traffic infrastructure system solution for detecting traffic accidents that have occurred on pedestrian crosswalks.

Contribution to the development of the sector’s business environment and network of partners    

At the international level, the company participated in the first quarter in the International Congress of the Public Transport Union Dubai UITP MENA and at the meeting of the members of the Intelligent and Autonomous Transport Systems Organisation (CCAM) in Brussels to discuss developments in the field and future activities at European Union level. 

ITS Estonia led the meeting with representatives of Transport Canada. In addition, CARIAD, an automotive software and technology company, was met, which brings together the Volkswagen Group's software competencies with the aim of increasing the Volkswagen Group's speed of innovation to make vehicles more sustainable, safer and connected.

In the second quarter, the company participated in the OECD International Transport Forum in Leipzig and ITS Europe Congress in Toulouse. In addition, the Prime Minister of the Republic of Estonia was accompanied in a visit to Gothenburg, Sweden. The aim of the business visit was to establish a link between Estonian and Swedish entrepreneurs and to promote cooperation in the field of sustainable development and green transition.

The Krakul team participated in the International IoT Solutions Fair “IOT Solutions World Congress Barcelona”, where the IoT solutions developed by Krakul were introduced together with the collaborator Richardson RFPD.

Company's secondary public offering of shares

During the period from 22 April to 2 May, the company carried out a secondary public offering of shares. Up to 151 261 ordinary shares were publicly offered, of which 42 876 shares were subscribed for by 351 investors for a total of 264 973,68 euros. The secondary public offering of shares came at a difficult time due to the Russian-Ukrainian war, when the geopolitical situation in Europe was and continues to be unstable and the general economic climate in the stock markets is not favourable. Compared to 2021, investors have been more conservative in the first half of the year.  

Economic results

Reporting period ended with a loss of 440 173 euros (the first half of 2021 a loss of EUR 207 897). The loss was due to expenses made for the growth and development of the company, the further development of its own product, the recruitment of additional employees to increase its internal competence and non-recurring expenses related to the secondary public offering and admission to trading of shares. 

Three key positions were added to the Bercman team in the first half-year: Head of Growth and BD, Head of Marketing and Communication and Chief Financial Officer. The Krakul team was joined by a development manager, who is responsible for the development and implementation of the company's product development processes.

In macroeconomic terms, the availability of certain product components was further affected in the first half of 2022 by the COVID-19 pandemic, which in particular caused delays in the delivery of components. The company's activities have also been affected by the Russian-Ukrainian war, which has caused delays in customers' decisions and progression of projects. In-progress projects due to the instability caused by the war have not been cancelled by customers. Increased inflation and rising energy market input prices have led to some increase in component buy-in prices. 

Consolidated statement of financial position
(in Euros)

Consolidated income statement 
(in Euros)

Consolidated statement of cash flows
(in Euros)

Consolidated statement of changes in equity
(in Euros)

   Equity held by shareholders and partners in parent company

Estimation revision

Bercman notifies that it adjusts the turnover figures and turnover forecast compared to the information submitted on 28.03.2022 from 2.445 million euros to 1.80 million euros for the current year and from 4.051 million euros to 3,1 million euros for 2023.   

Bercman adjusts the 2022 forecasts published at the beginning of the year based on the general global market environment and the results of the secondary public offering of additional shares in April and May. The main objective of the issuance of additional shares was to accelerate the expansion into new markets and the development of hardware and software for the development of new functionalities for the smart pedestrian crosswalk. 

Mart Suurkask, CEO of Bercman: “We are adjusting the forecasts due to the failure of the investment plan in spring and the general economic climate. Although the supply crisis caused by the Covid-19 pandemic is beginning to recede for us in the second half of the year, the pessimistic overall economic situation has extended Bercman's sales processes for its own products, so we have decided to reduce sales forecasts. The need for technological solutions, and hardware and software developments have not disappeared anywhere in the world, and I wish to assure the shareholders that in the background, thorough work is underway to ensure that sales forecasts are filled and that technological solutions and services reach the group's customers as expected.”

Bercman is a deep tech company founded in 2016 that develops and sells road safety products and provides hardware and software development services. The company's vision is to be the most preferred partner in implementing smart city solutions.  In addition to its own products, Bercman offers custom solutions for large customers.  Bercman acquired Krakul OÜ at the end of 2021 for the implementation of large-scale IoT projects and the further development of his own products. Krakul is an IT company focused on the development of IoT and autonomous platforms solutions. Krakul and Bercman together form the Bercman group.

Additional information:

         Mart Suurkask, CEO
         AS Bercman Technologies
         Telephone: +372 5340 2902
         E-mail: mart.suurkask@bercman.com