PTV.L Regulatory News (PTV)

03 December 2012

PeerTV PLC

("PeerTV" or "the Company")

Trading Update

Solution to hardware issues

The board of PeerTV (AIM:PTV), a provider of technology solutions for the OTT (TV over the internet) market, and PCB (printed circuit board) production solutions, wishes to update the market of the following developments.

On 18th October 2012 it was reported that PeerTV Ltd was experiencing new hardware issues in its legacy product, the ES550 set top box and that the client who had ordered the Android boxes had put this order on hold.

The directors are pleased to report that this issue has now been resolved. The order for the Android boxes has been reactivated and the agreed 25% down payment on the order has been received. The Android boxes are scheduled for manufacture and delivery during the first quarter of 2013.

This followed an agreement with the client under which:

a) The Company's subsidiary SM Digitek (1993) Limited ("Digitek") is carrying out the necessary repairs to the faulty set top boxes supplied to the client.

b) The subcontractor which originally manufactured the set top boxes is reimbursing Digitek for the cost of carrying out the repairs and supplying replacement components.

Importantly, the same client has issued a Letter of Intent to purchase up to 15,000 additional set top boxes in June 2013 subject to the first order being delivered in full by the end of March 2013 and a satisfactory level of sales. Supply of this possible order would result in sales revenues in excess of $1.3 million.

The receipt of the Letter of Intent followed a series of discussions with the client, during which the advanced capabilities of the Peer TV Android 4G technology were demonstrated. PeerTV management team decided to switch immediately to this most advanced Android version in the market, employing Android 4.0 in conjunction with an advanced M3 chip. This initiative should keep PeerTV's Android box at the leading edge of IPTV technology. Management believes that the integration of this advanced technology into the Peer TV software provides an important competitive advantage. Discussions are progressing to supply this enhanced Android software and hardware to other potential clients.

In parallel, a series of cost cutting measures have been implemented. PeerTV Ltd and Digitek are now sharing premises and the monthly burn rate of PeerTV Ltd has been reduced by about 40% with effect from December 2012.

As previously reported, the recovery in the sales levels of Digitek has been slower than expected, putting pressure on cash resources. Nevertheless there are positive signs, including the acquisition of some 33 new customers in 2012. Digitek currently serves over 100 active customers, more than ever before. Digitek is also progressing the necessary approvals required to work with some new customers from the military and medical sectors. Discussions are progressing with several potential high volume customers and the market will be notified as soon as relevant agreements have been signed.

 Leon Nahon, the Chairman of PeerTV plc said " We are pleased that the issue has been resolved. The reactivation of the order and the receipt of the Letter of Intent for a further order provide strong validation for the new Android set top box and is vital for the relationship with our major customer. This is also expected to be the springboard for converting existing sales leads to orders. We expect our subsidiary Peer TV to be cash positive from operations next year. Meanwhile significant steps are being taken to build up sales in Digitek and to reduce our operating costs. However, following the delays with the PeerTV order and the lower than expected sales levels very careful cash management must be maintained."

Further enquiries:

PeerTV Plc

Leon Nahon, Chairman +972 974 07315

Libertas Capital Corporate Finance Limited

Thilo Hoffmann/Andrew McLennan +44 (0) 20 7569 9650

Peterhouse Corporate Finance

Jon Levinson/Eran Zucker +44 (0) 20 7469 0932