ASTG: INTERIM REPORT JANUARY – SEPTEMBER 2016

CEO’s Comments

A Quarter with Advanced MIL-tests

At the beginning of the quarter our goal was to complete MIL-tests, as well as deliver the first MIL-approved system in the history of the company for a customer in Israel. I am the first to regret that this was not executed. An achieved MIL status is itself a sign of high quality. However, we have chosen to walk the extra mile and add customer specifications, based on the end-customer’s reality, where small errors can carry very serious implications. In addition, we together with the customer analyzed every subtest’s results and in some cases, chose to re-test. All this to secure with the highest certainty that the system corresponds with our customer’s reality.

A Top-notch Satellite Antenna

Ever since we started working on finalizing the P9 / the Ku100-MIL, we have had the clear objective to obtain, through independent tests, evidence of the antenna’s excellence. Now, we and our customer in Israel are assured of how the antenna performs.

Knowledgeable people within the field, outside of ASTG, who last summer called the specification virtually unattainable, has during the MIL-testing process witnessed the opposite. For us this is a good indication of what we – based on approved tests – can offer the market.

The Industrial Phase and Series Delivery

At the time of writing, we and our customer have made the overall assessment that the MIL-testing is in its absolute final stage. The next phase, the industrial phase, is well prepared by including supply agreements, stockpiling of long lead time components, documentation, and quality assurance. This gives us great capacity to quickly execute the Israeli order.

Liquidity

Our liquidity is still strained. However, we have a monetary safety anchor thanks to some major shareholders. These have endorsed the promissory note, and thereby given the company both the internal and external safety needed.

Prospects Based on a MIL-approved P9 / Ku100

The delay of the MIL-process has meant that capital flow from sharp deliveries failed to materialize. In this situation, it is more than likely that there is a backlog of MIL-approved Ku100 antennas, which would be a very positive scenario.

There has been a significant interest from the outside world, both during and after the period. We answered several inquiries as well as a more extensive RFP Request for Proposal (tenders / procurement). The greatest interest, both looking at an existing customer in Europe as well as prospective customers, has been focused on the possibility of obtaining the P9 in a Ka-band version. Since the basic structure of the P9 system was modeled with such requests forecasted, development and adjustment are mainly restricted to the specific elements within each frequency band. Our methodology has from the very beginning been to build a P9 modular system with a common basic structure, relatively easy to add to both the KU100-MIL with internal BUC, Ka- and X- band.

Finally, I want to take this opportunity to thank all employees for yet another quarter which meant great personal sacrifice. Without your dedication and seemingly tireless enthusiasm to make this happen, we would never be where we are now. Our ambition is to be able to give shareholders and everyone else around the MIL project, the long-awaited announcement before Christmas, namely that MIL-certification has been achieved.

Andreas Adelgren, CEO

For more information contact:

Andreas Adelgren, CEO Advanced Stabilized Technologies Group AB (publ)

072-73 74 317, andreas@astg.se

ASTG AB (publ), org. nr 556943-8442 published this information in accordance with the Annual Accounts Act Chapter 9. and BFNAR 2012: 1 the so-called K3 rules.

This report has not been audited by the company auditors.

(For full report see attached file)