The last few months have been busy for XTAR. We signed a capacity agreement with the Royal Danish Navy, entered into Master Sales Agreements with three major government service providers and delivered papers and presentations at half a dozen key international industry forums. We also boosted our senior management team with the addition of a seasoned government sales executive, and received a prestigious industry award recognizing XTAR's innovative technology.

Dr. Denis Curtin receiving the SSPI Industry Innovator Award for XTAR from David McGlade, CEO of Intelsat, sponsor of the annual SSPI award.

At the beginning of the last quarter the U.S. Army and Air Force each issued a comprehensive report detailing the results of earlier XTAR demonstrations. These results proved that XTAR delivers higher throughput with legacy terminals, and superior performance with advanced modems. For instance, typical throughput with legacy terminals was 1 1/2 Mbs, but this performance jumped to 8 Mbs over XTAR-EUR. Using advanced modems and only half a transponder XTAR delivered 75 - 100 Mbs, depending on the size of the terminal.

We are very pleased about the contract we signed with the Royal Danish Navy (RDN). The initial five-year agreement will provide the RDN with capacity either in right- or left-hand circular polarization on XTAR-EUR for communications services throughout Europe, Africa and the Middle East. This is the third government to recognize the unique value of XTAR's capabilities and we anticipate additional agreements in the coming months.

Early in January we made an important addition to our senior management team in the person of Larry D. Haughey Vice President, Government Markets. Larry's previous government sales history with MCI, Teleglobe International, Contel ASC and COMSAT make him a familiar figure within the halls of the Pentagon and military SATCOM branches. He brings valuable industry knowledge and experience to our marketing team.

In mid-February, XTAR received the prestigious Industry Innovator Award from the Society of Satellite Professionals International (SSPI). The SSPI Industry Innovators award program salutes organizations in both the private and public sectors that have made outstanding contributions to the development and growth of the global satellite industry.

XTAR amply demonstrated its ability to increase the performance of the DoD's legacy X-band SATCOM terminals without modifications during demonstrations last year with the Army's 7th Signal Brigade and the Air Force's 1st Combat Communications Squadron (see http://www.xtarllc.com/news/press.htm for more details). Terminals used in these demonstrations included the Army's TSC-85 Ground Mobile Force X-band terminal and the LHGXA antenna, and the Air Force's USC-60A tri-band terminal. Following nominal upgrades with high performance modems and LHCP (Left Hand Circular Polarization), these same terminals demonstrated dramatic improvements in data rates (75 Mbs for the TSC-85 and USC-60A terminals, and 105 Mbs for the LHGXA antenna), plus a doubling of accessible bandwidth.

XTAR's high power also enables operations with manpacks and "comms-on-the-move" platforms, particularly when used in conjunction with a new X-band SATCOM product from DRS Codem, Inc, Merrimack, NH.

DRS Codem's XOTM Antenna

Dubbed the X-band Satellite Communications-On-the-Move (COTM) Antenna, DRS Codem unveiled its new subsystem in February at the Satellite 2006 Conference in Washington, D.C. This XOTM Antenna Subsystem is an affordable On-the-Move (OTM) solution combining a rugged mechanical architecture with the highest quality Commercial Off-The-Shelf (COTS)-based components for vehicle, shipboard and aircraft applications.

The XOTM antenna targets the military, homeland security and commercial markets utilizing high-performance radio frequency (RF) antenna applications. It is designed for continuous high bandwidth voice and video in a highly dynamic environment. Its design is based on proven technologies in a turnkey OTM package, integrating navigation sensors, control electronics and RF equipment on its pedestal and providing improved stabilization, acquisition and tracking performance. The combination of open-loop pointing, closed-loop tracking and software algorithms for sensor fusion enable high performance in an affordable architecture.

DRS Codem's new XOTM antenna is ideally suited to exploit XTAR's high power. It could significantly improve communications to highly mobile Army and Marine battlefield units, as well as extend the Navy's network-centric architecture down to smaller ships that have been denied access to high data rate X-band SATCOM in the past.

XTAR is planning demonstrations of the new antenna subsystem with XTAR-EUR in Europe and XTAR-LANT in the U.S. For more information on DRS Codem's new XOTM antenna, contact Joseph Johnson at 603-429-0111, X560 or Johnson@drs-cs.com.

XTAR-EUR, and XTAR-LANT, to be operating from 30∞ West by the end of March 2006, provide users with a number of technical improvements over earlier X-band satellites.

Most significant are the 100W Traveling Wave Tube Amplifiers (TWTA's) that generate very high Effective Isotropic Radiated Power (EIRP) values. Coupled with steerable, 4.5∞ beam antennas, XTAR realizes EIRP values of 48 dBW ensuring communication with even the smallest X-band antennas. XTAR's global horns generate EIRP values of 38 dBW, providing users the full geographic footprint of the geostationary orbit. Another feature are XTAR's steerable beams: they are highly flexible and have no restrictions on the number of times they can be moved to accommodate customers' unique requirements.

XTAR provides wide-band spectrum by sizing the transponders at 72 MHz. While many customers prefer to load a transponder with multiple smaller carriers, the bandwidth of the XTAR transponders also allows for very large carriers if needed. XTAR's high power amplifiers allow the use of advanced coding techniques while maintaining acceptable Bit Error Rates (BER), thereby ensuring extremely high data rates while maintaining the links through even the most severe weather.

Another first for this unique X-band service is the use of both circular polarization schemes. XTAR can accept either RHCP or LHCP transmitted carriers. This effectively doubles the total capacity of the payload compared to the standard method of using only a single polarization scheme.

With these unique technical differentiators, XTAR is continuing its innovative path to be the premier provider of commercially available X-band spectrum to U.S. and allied military forces.