PTV.L Regulatory News (PTV)

1 February 2010

PeerTV PLC

("PeerTV" or "the Company")

Technical Issue causes erosion of margin in second half 2010

PeerTV (AIM:PTV), a provider of technology solutions for the OTT (TV over the internet) market, announces that, as a result of certain technical problems, it has incurred additional costs which will have a material negative impact on the profit margin for H2 2010.

The first issue was a technical problem which has arisen in the interaction between the HDMI and WiFi functionalities of their PeerStation. This issue was at first intermittent and limited to certain customers and was not considered material. Subsequent analysis has revealed that the problem was more broadly based and was a problem of hardware configuration and not of software. The Company believes that it has resolved the problem for the production of new set top boxes and an upgrade for boxes already installed has now been developed.

There was also an issue with the lead time for the supply of Sigma chips which caused manufacturing delays and hence sales delays. While there is no indication that this is currently an issue, it is outside the sphere of influence of the Company and may occur again in the future.

The final cost impact, in particular for the post installation fix, is not yet known but is expected to have a material negative impact on the profitability for the second half of 2010.

To better manage production and outsourcing issues the board is evaluating a potential acquisition of an outsourcing manufacturer in which PTV would aquire the merger partner with shares. If such transaction were to come to fruition it would require shareholder approval and may constitute a reverse takeover under AIM Rules. The board will keep the market updated on this issue.

Eatamar Drory, Chairman of the board and Chief Technology Officer commented:

"While it is unfortunate that a relatively minor technical issue is expected to have a significant impact on our financial performance, it is to the credit of the technical team here at PeerTV and our good working relationship with our clients that we were able to identify the issue to be a problem at the manufacturing level and that we have found a solution that both we and our clients are comfortable resolves the issue. We are also evaluating ways to strengthen our manufacturing and QA procedures and capabilities to avoid such issues in the future."

Further enquiries:

Notes to the editor:

PeerTV provides end to end hardware and software solutions for providers of Internet TV services delivered via broadband internet connections. The solutions allow the Company's clients to provide full scale internet based TV services at a fraction of the price of traditional broadcasting technologies.