INTERIM REPORT FOR THE PERIOD 1 JANUARY 2009 TO 31 MARCH 2009

(NG: C2ST B)

Preparations, analysis and establishment of a new strategy

• Net sales for the first quarter amounted to SEK 1.5 million (SEK 0.9 million)

• The net loss for the first quarter amounted to SEK –7.7 million (SEK -6.6 million)

• Three antenna systems were delivered and recognised as revenue during the period

• Order bookings during the period comprised two antennas

• Order bookings after the conclusion of the period thus far include another ten antennas

• C2SAT has successfully carried out a new share issue of SEK 29.6 million

• C2SAT has issued warrants exercisable in June 2009

• C2SAT has opened a representative office in China

(for data, see attached file)

Statement from the CEO

For those of us in the new management, the first quarter was largely spent analysing C2SAT’s position and opportunities, meeting current and potential customers, and, based on this process, agreeing on a new strategy for the Company. As a result, we also took a number of measures during the quarter and established clear, measurable goals to ensure C2SAT’s transformation from a development company to a well-functioning industrial company. The measures will not be fully implemented and have an impact until the end of the second quarter at the earliest, however.

The Company has established a number of clearly defined goals, both short- and long-term, including that C2SAT will generate quarterly sales growth of at least 50 per cent over a two-year period. Moreover, we will reach positive cash flow no later than 2010 and within two years C2SAT will be established as one of three global antenna manufacturers, with a market share of 15 per cent.

We have focussed on C2SAT’s product portfolio, adapted our offering to the market, and strengthened the organisation through recruitments, mainly in sales though also with respect to technical, service and administrative staff. C2SAT’s product portfolio is competitive in terms of both our antennas’ performance capabilities and their functionality. It has been important, however, to reassess how we present and sell our products. End-customers are price-sensitive and want standardised products with quick deliveries. Further, they are buying a service, not just hardware. Development activities are continuing, but now with a focus on system integration to ensure that C2SAT will meet the future requirements of leading system integrators.

The emphasis today is on establishing a distribution network, with the highest priority being Asia, the Middle East and Europe. This distribution network, which also includes an installation and service network, should be in place before the end of the third quarter. This is crucial in order to generate steady sales, whereas before the Company focussed on large procurements with long sales cycles. We must be able to actively support our distribution network. It is against this backdrop that additional sales employees are being recruited. In addition, it has been important to quality assure all deliveries and to provide support and maintenance in connection with the installation and ramp-up of new antenna systems.

The first visible signs that changes have begun should soon become evident in the form of increased order bookings and invoicing. We would already note that C2SAT received more orders during the period April-May than during the entire previous fiscal year and that we expect to win additional orders before the end of the second quarter.

With our shareholders’ support, we were able to successfully complete a new share issue in January, which provided the Company with SEK 29.6 million before issue expenses. The issue was oversubscribed and generated sufficient liquid assets to assure the Company’s operations and production in the short term. To ensure its long-term needs, C2SAT has also issued warrants exercisable in June. If fully exercised, the warrants would provide C2SAT with SEK 49 million. With these funds, C2SAT can implement the strategy adopted by management and be well-equipped for the future.

Solna, Sweden, May 2009

Fredrik Nygren, CEO

(for full report, see attached file)