Delft, August 31, 2022

The first half of 2022 is for ZEPCAM focused on strengthening our commercial strength in our core countries, introducing the live streaming bodycam T3, accelerating the development of our software technology and obtaining additional financing. In Germany, the police and fire brigade of the state and capital Berlin were acquired as new customers with the T3 bodycam. In the Netherlands the milestone of 100 was reached
municipalities whose BOAs work with our bodycams, while in Belgium the milestone of 25 police zones was reached.

Turnover and commercial activities

In terms of orders, the year started slower than planned and a turnover of € 0,81 million was achieved versus € 1,05 million last year. In particular, the timing of new large tenders is difficult to manage, which means that turnover in the first half of the year is slightly lower than the same period last year. There are several larger tenders underway that could positively influence turnover development. The turnover from our fixed stream of license income ('recurring revenue') from existing customers grew steadily during the first half of the year and in June was more than 10% higher than the amount realized in January. This is an important indicator that existing customers are satisfied.

In the meantime, we have significantly strengthened our position in our core countries. In the Netherlands we have managed to confirm our market leadership and the BOAs of 103 municipalities now work with our bodycams. Staatsbosbeheer has also chosen to equip its 'nature BOAs' with body cameras from ZEPCAM. In Germany, the police and fire brigade of the capital and state of Berlin recently opted for ZEPCAM with our new T3 bodycam: a perfect reference customer! We now have 4 states as customers (a quarter of the total states), and testing is being carried out by another 4 states. In addition, in Germany we are fully committed to local enforcement services and the fire brigade through a newly recruited partner and the deployment of additional people.

In Belgium, the 25th police zone has chosen ZEPCAM. In France we have a new partner who focuses specifically on local enforcement ('police municipal'). These local enforcers are allowed to work with body cameras after a recent extension of the legislation. We have also acquired a new partner in Switzerland, which already has all 26 police cantons as customers for its own activities.

We have now concluded distribution agreements for Australia/New Zealand and for Latin America with 2 solid partners who process, supply and service the entire region for ZEPCAM.

Introduction live streaming bodycam T3

In the recent period, the live streaming bodycam T3 has been introduced to potential customers and has received a positive response. In the Netherlands, the municipality of Breda has chosen to purchase T3s for their BOA enforcers. In Germany, as mentioned, the police and fire brigade of the state of Berlin have chosen our T3. Our distributor in Australia/New Zealand has acquired its first customer for the T3 and in Latin America our partner is close to an agreement with a major capital as the first T3 customer there. In addition, many tests are being conducted with potential customers in different target groups.

Development of our software technology

Despite the tight labor market, we have managed to strengthen our software development team. The integrations of our ZEPCAM system with the control room systems of Milestone Xprotect and Genetec Clearance are now complete. This allows us to actively enter the security market. In addition, we have made great progress in expanding the T3 functionality from 'streaming' to 'recording' (recording images on the bodycam). This broadens our possibilities with the T3 to more different public and private applications and organizations.

Additional NPEX financing and prospects

Our convertible bond that is currently open for subscription on NPEX has now been subscribed for almost € 1M. The first two tranches were settled in July and August. We are positive about the prospects. The underlying market is developing favorably and is still in the early stages of bodycam adoption. However, especially in the public sector, processes can have long lead times. At the same time, Europe is currently confronted with special geopolitical circumstances, high inflation, the risk of recession, and disruption of production chains and distribution channels. It is therefore difficult for us to express a concrete expectation for the entire year.