Trading Update

SEATTLE - April 18, 2008 – Citel, which designs, develops and markets a range of Voice over Internet Protocol (VoIP) solutions for the business telephony market, today reports on trading for the financial year ending 31 March 2008.

For the 12 months to 31 March 2008, revenues are expected to be US$4.68 million, an increase of 5% from the US$4.48 million reported in the prior year.

Citel’s business model is based on signing supply agreements with telecommunication carriers and internet service providers, enabling them to offer Citel’s Portico Telephone VoIP Adapter ("Portico TVA") as part of their VoIP solutions. In addition, Citel sells direct to large/medium size enterprises.

During the financial year, Citel secured supply agreements with multiple Tier 2/3 carriers. These contract wins have served to underline the potential of Citel’s Portico TVA product within the smaller carrier space. The pipeline of opportunities with these carriers continues to grow.

Citel continues to target sales directly to large/medium sized enterprises and has achieved traction in this area. Direct customer relationships with these enterprise clients enables Citel to drive more immediate revenue, and importantly, demonstrate to the carriers the practical and commercial benefits of the Portico TVA product operating within large enterprises.

At 31 March 2008 Citel had a net cash balance of US$162,000 and an additional borrowing ability of approximately $160,000 (the facility is based on a percentage of receivables so will vary over time). As a result of expense reductions previously announced, the Company’s expected monthly cash burn rate for the next three months has been reduced to average approximately $75,000 per month. Whilst progress has been made in reducing the burn rate the Directors note that additional funding will be required in order to reach cash flow break even. The Directors continue to consider options with a view to maximising shareholder value and will make further announcements as appropriate.

Enquiries

Citel
Jose David, Interim CEO
+1 206 965 8925

Panmure Gordon
Dominic Morley
Giles Stewart
Andrew Collins
+44 (0)20 7459 3600

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