Techstep ASA — Earnings Release 2010

Aug 20, 2010

Birdstep Heading for Profitability towards the End of the Year

(Oslo, 20 August 2010) Birdstep Technology ASA

reported an EBITDA of NOK -7.2 million in the second

quarter of 2010 (-6.1), and NOK 20.2 million (24.1) in

revenues. The company has significantly strengthened

its product offering and sales activities in the

quarter and is moving towards profitability by the end

of 2010. In addition, Birdstep Technology ASA fully

expects to be profitable for 2011.

- Following the strengthening of the product offering

and increased sales activity, as announced when

presenting the new corporate strategy in May, Birdstep

has built a solid customer pipeline and is on track

delivering two new agreements every quarter. With the

positive development in EasyConnect activations and

recent agreements, the company expects to move towards

profitability by the end of this year and to be

profitable for the full year 2011, says Torbjörn

Sandberg, CEO of Birdstep Technology.

Birdstep Technology's second quarter 2010 revenues

were NOK 20.2 million (24.1), with an EBITDA of NOK

-7.2 million (-6.1). The cash flow was NOK -9,8

million, and cash and cash equivalents at the end of

the quarter was NOK 37.7 million (59.0).

527 049 new customers activated their USB modems with

EasyConnect software during the quarter, compared to

457 759 activations in the corresponding quarter last

year. In May, the company was awarded a three year

EasyConnect contract with a leading European operator.

For the initial launch country only, Birdstep

Technology estimates the revenue for the first 2 years

to amount to NOK 8 million. After the closing of the

quarter, the company has announced an EasyConnect

Inside agreement with a North American service

provider and an EasyConnect Advanced agreement with

Virgin Media in the UK.

- Our sales team is very active in the market place

and several new contracts are approaching closing.

With the resent contract wins and healthy sales

pipeline I'm comfortable on delivering on our short

term activations and earnings growth targets. With the

launch of EasyConnect 3.0 in the third quarter of 2010

and the SafeMove 5.2 early in the fourth quarter, we

have a solid product offering coming to the market in

the second half of the year, says Sandberg.

Following the corporate strategy of focusing the

company's resources on EasyConnect and SafeMove,

Birdstep Technology signed a share purchase agreement

with Raima Holding Company LLC, a newly established

company owned by the current management of Raima, in

July. The transaction is expected to close at the end

August.

- Through the sale of Raima, the risk of further

negative contribution to operating result has been

reduced and Birdstep Technology expects to be able to

reach a profitable run rate at an earlier point in

time. In addition, the company has engaged an external

advisor to explore alternative strategies for

improving shareholder value, including among other

things additional divestures of non-core investments

and business, says Sandberg.

For further information, please contact:

Torbjörn Sandberg

President and CEO of Birdstep Technology ASA

+46 70 5170964

Torbjorn.Sandberg@birdstep.com

Alex Gundersen

CFO of Birdstep Technology ASA

+47 41 474107

Alex.Gundersen@birdstep.com