INTERIM REPORT FOR THE PERIOD 1 JANUARY 2010 TO 31 MARCH 2010

Positive sales trend and further expansion

• Net sales for the quarter amounted to SEK 8.3 million (SEK 1.5 million)

• The net loss for the quarter was SEK -10.8 million (SEK -7.7 million)

• Seventeen (17) antenna systems were delivered and recognised as revenue during the period

• Order bookings during the period comprised thirteen (13) antennas

• Order bookings after the conclusion of the period thus far include three (3)additional antennas

• Deliveries have begun from Singapore

• The Board of Directors has proposed that the Annual General Meeting approve a new share issue of about SEK 39 million

• C2SAT is on track to meet its goals and expects to deliver 120 antennas in 2010

• After the conclusion of the report period the Company closed debt financing commitments of up to SEK 17 million, including SEK 4 million in credits obtained during the period and an additional SEK 7.5 million made available after the conclusion of the period.

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

Statement from the CEO

In the first quarter of 2010 C2SAT’s sales reached approximately SEK 8.3 million and it was able to deliver and invoice 17 antennas. In the process the Company reported the highest quarterly sales in its history and surpassed its quarter-on-quarter sales growth target of 50%. Moreover, it delivered as many antennas during the first quarter of 2010 as it did in all of 2009.

Of the 17 antennas delivered during the quarter, 16 were Ku-band antennas and one was a Cband antenna.

The largest customers during the period were Orange and Thales, although deliveries were also made to our distributors PT AJN Solucindo and Diamond Technologies Ltd, among others.

As previously announced, the focus now is primarily on achieving our sales goals. Only through substantial volume growth, combined with significantly improved gross margins, where volume is obviously an important factor, can we be profitable with a positive cash flow. A negative gross margin was reported for the first quarter, which was because economies of scale and the use of previously purchased material were not yet reflected in our numbers. Our goal is a long-term gross margin of at least 30%. The Company does not believe this is unrealistic once it boosts purchase volumes and when product improvements and production rationalisation measures eventually have their full impact.

Even though the Company met its sales volume goal, the product mix was a disappointment. Our goal for 2010 is to maintain a long-term mix of about 25 per cent C-band antennas and 75 per cent Ku-band. Measures have already been taken to raise sales of the former, which command a higher sales price and a higher gross margin per unit sold. We are focused on raising sales of C-band antennas, primarily in Southeast Asia, during the remainder of 2010.

Despite some production and sales delays in Singapore and China, the trend is now clearly pointed in the right direction. During the current quarter our production partner in Singapore will begin delivering antennas, at which point sales efforts can be intensified throughout the entire organisation, since we will then be able to meet the need for “quick” deliveries, which in many cases is decisive in order to increase sales.

As another element in focusing on its key markets, C2SAT has posted two of its own service technicians in Singapore since the end of March. The expectation is that expanded service and installation capabilities will lead to higher sales in the area in the future.

In China, our licensed manufacturer and exclusive distributor, Xinguo IT Ltd, is now in position to begin local production and sales. Xinguo IT has established an extensive local distribution network in the Chinese market in recent months. Moreover, it offers significant cost advantages, which the production units in Söderhamn and Singapore will eventually be able to benefit from by sharing purchase agreements.

The last quarter was also highlighted by the further expansion of our distribution, service and installation network to include new partners in the Philippines, Hong Kong, Lebanon, the Caribbean and Panama. This gives us a bigger sales organisation, but is also critical to C2SAT’s ability to compete as an antenna supplier that can offer a comprehensive network to handle installation and service of antennas. End users heavily rely on access to quick, professional service regardless of where a ship happens to be. Our efforts to remove any remaining “blank spots on the map” for end users are continuing.

Furthermore, intense efforts are under way internally to guarantee product compatibility and quality, obtain the necessary certifications and develop additional functionality. Next on our agenda is the launch of a so-called Co-Pol option, which is essential in order to supply Ku-band antennas to the leading Ku-band operators, primarily in Southeast Asia.

As previously announced, the Company's goal in 2010 is to deliver 120 antennas. This remains unchanged, based on the results for the first quarter. In the current quarter we expect to invoice and deliver at least 20 antennas. A critical factor to reach the sales target is the ability to deliver and install the antennas. During the first quarter we were able to maintain full production capacity. With the imminent addition from Singapore, we expect to be able to produce and deliver at least 20 antennas during the second quarter. Full production capacity will not be reached before the third quarter, however.

In summary, C2SAT is meeting the goals it established. Because of rapid volume growth, coupled with intense efforts to expand functionality and compatibility, ensure certification, grow our network of distribution, service and installation partners, cultivate new customers and take care of existing ones while at the same time completing current deliveries and cutting costs, C2SAT’s organisation is facing great strains.

It is crucial therefore that we can turn our attention from operational issues to our long-term future. We know that we have to expand our product range, at the same time that we have to actively develop future functionality. It is especially important for this reason that C2SAT’s organisation is strengthened with cutting-edge expertise in antenna performance and functionality. This is especially true in areas that will form C2SAT’s core business if it wants to continue to develop its products and reduce the vulnerability of the operations it has established over the years.

Lastly, it is important that the Company has the opportunity to grow. Our expansion will require additional financing from shareholders and outside lenders in order to increase working capital and continue to finance the investments launched in recent quarters.

Solna, 6 May 2010

Fredrik Nygren, CEO