INTERIM REPORT FOR THE PERIOD 1 APRIL 2010 TO 30 JUNE 2010

(NGM:C2ST B)

• Net sales for the second quarter amounted to SEK 8.7 million (SEK 3.1 million)

• The net loss for the second quarter amounted to SEK -10.9 million (SEK -6.8 million)

• Positive gross profit trend thanks to an improved product mix

• Production has now been established in Singapore and series production is under way

• During the period the Company completed the delivery of Ku-band antennas to Thales

• 15 antennas were delivered and 13 were recognised as revenue during the period

• A number of C-band antennas were delivered to operators and system integrators in Southeast Asia for evaluation

• After the conclusion of the period the Company finalised a new share issue that generated proceeds of approximately SEK 38.9 million before issue and guarantee expenses

• After the conclusion of the period production was started in China and the first orders for three (3) control system licenses were received

(For full report, including tables, see attached file)

Statement from the CEO

In the second quarter of 2010 C2SAT reported sales of approximately SEK 8.7 million (SEK 3.1 million) and delivered 15 antennas, 13 of which were invoiced and recognised as revenue during the period. Two C-band antennas were delivered as Proof of Concept (POC). If their performance meets certain predetermined criteria during an agreed evaluation period, the contract will convert to a sale. In total, 32 antennas were delivered to customers during the first half of 2010, compared with six antennas in the same period of 2009 and 17 antennas for all of 2009.

Although the second quarter was the most successful in C2SAT’s history in terms of sales, we did not reach our goal of 50% sales growth for the quarter or on an accumulated basis for the first half-year. We are still positive about the goals, however. The sales result for the first half-year, about SEK 17.0 million (SEK 4.6 million), is only about 10% below our goal (SEK 19 million) and can be explained partly by POC deliveries that are not reported during the period and partly by delivery delays in current projects.

We had hoped to deliver at least 20 antennas during the second quarter. The actual number was 15. The main reason for this, aside from an expected delay in a delivery from the second quarter to the fourth, was that we were working hard to create a better product mix after what proved to be a disappointment during the first quarter, even though we exceeded our volume goal. We have taken measures to increase sales of C-band antennas, which generate a higher sales price and better profit margin.

The product mix was significantly improved during the quarter. In addition, POC deliveries were made to integrators and operators in Southeast Asia. During the period preparations were also made for a POC delivery to another operator.

An unsatisfactory operating loss of SEK -11.0 million was reported for the second quarter and SEK -22.0 million for the first half-year. The loss level has remained fairly constant over the last four quarters. The substantial increase in sales did not compensate for higher costs for a muchneeded

organisational expansion, since the gross margin has been and clearly is unsatisfactory.

The improved product mix helped us to report a slightly positive gross margin of about 3% for the second quarter, compared with a negative gross margin in the first quarter. The goal is a margin of at least 30% by the first quarter of 2011. This is critical to the Company's ability to generate profits and a positive cash flow. Several cost-cutting projects are scheduled to be completed during the second half of 2010 and will gradually have an impact on the gross margin. Additional measures may be needed to achieve our goal of 30%.

In C2SAT’s current expansion phase, POC sales are an important factor in order to gain a foothold in the maritime VSAT market. Against established suppliers like SeaTel and Orbit,

C2SAT has to compete mainly on performance, and not like most new Southeast Asian suppliers on price, which makes it important that large, established players have the opportunity to verify C2SAT’s performance for themselves, without any financial risk.

During the second quarter and early in the third quarter C2SAT devoted considerable time and resources to cultivating several established, market-leading system integrators. We have consistently received positive responses and as a result will now make a number of POC

deliveries this fall.

After the second quarter we laid off our staff in China, who have since been hired by our exclusive partner, Xinguo IT Ltd. C2SAT continues to provide Xinguo IT with development resources to adapt products to local conditions as needed in order to reach our full potential in the Chinese market.

As previously announced, Xinguo IT is in position to begin production and sales and will complete a number of test installations with customers this fall. After the conclusion of the report period C2SAT finalised the initial delivery of software and control systems for a number of antennas. Additional deliveries are not expected until the test installations are completed and evaluated this fall.

Our distribution, service and installation network is continuously growing. New partners were established in Turkey, Vietnam and Malaysia during the second quarter. Our distributor in Turkey, Profen Ltd, received its first Ku-band antenna. Our new partner in Malaysia, ScopeTel SDN BHD, which is focused on the global offshore sector, has ordered a C-band antenna for delivery in the third quarter. At the same time we have decided to terminate our cooperation with Can Traders and Services Ltd in Singapore, which was entered into in August 2009, as both parties are in agreement that the alliance has not produced the desired results. The review and evaluation of new and old partners is part of our organisational development.

We continue to strengthen our organisation, because it is important that C2SAT has cutting-edge expertise in areas that are crucial to our antennas’ technical performance and functionality. This is especially true in areas that will be the Company's core competencies.

During the second quarter we hired a new project manager, Jan Otterling, who has previous experience from similar positions at Powerwave Technologies and Ericsson. In addition, a senior sales representative was added to our Singapore office on a consulting basis. After the conclusion of the quarter our CTO, Erik Dalin, decided to leave the Company. His responsibility has been assumed by Jan Otterling, who has been named a member of C2SAT’s management team. During the summer the Company also recruited two software engineers, a senior radio engineer and a service technician.

Our new Ku-band antenna with so-called Co-Pol functionality, C2SAT 1.2m Ku II, was launched at CommunicAsia in Singapore in June and has been well received by the market. The product will be put in production in September and is a significant part of the certification work that will be completed this fall. We still have to expand our product range, however, at the same time that we also have to develop the functionality that users will want in the future.

The new share issue we completed provided C2SAT with about SEK 38.9 million before issue expenses and was about 60% subscribed by shareholders with preferential rights, and the remainder through guarantees. The issue proceeds help to increase working capital, which is needed because of our rapid sales growth and to cover operating deficits until we achieve a positive cash flow. The Company's sales and gross margin will be decisive to its capital needs.

In the second half of 2010 our most important goals are a significantly improved gross margin and continued strong sales growth. These goals are partly inter-related. This is why we presented a goal at the Annual General Meeting on 6 May 2010 to deliver 120 antennas this year. A quantitative goal of 120 antennas can be considered a reasonable indication of what is required to meet our overarching financial targets of 50% quarter-over-quarter growth and a positive cash flow for the Group in Q1 2011.

The goal in terms of number of antennas sold is naturally affected by the breakdown between Cand Ku-band antennas, in the same way that the profit margin for each product varies.

For competitive reasons, and to protect long-term shareholder value, the Board of Directors has decided that information on the sales mix, distributor relationships, number of antennas delivered and which distributors have received deliveries will no longer be provided in the Company's quarterly reports.

In summary, I would say that C2SAT is developing in line with the goals and the strategy we have announced. Many activities are under way at the same time, and we remain confident as we continue to develop the Company.

Solna, 26 August 2010

Fredrik Nygren, CEO