Techstep ASA — Earnings Release 2010

Aug 20, 2010

birdstep TECHNOLOGY

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