Preliminary Annual Financial Report

29 June 2012

PeerTV PLC

("PeerTV" or "the Company")

Preliminary Results for the year ended 31 December 2011

PeerTV (AIM:PTV), a provider of technology solutions for the OTT (TV over the internet) market and PCB (printed circuit board) production solutions announces its audited results for the year ended 31 December 2011.

Key Developments 

·; Total revenue of $5.1 million of (2010: $5.3 million)

·; Loss, including costs associated with technical issues encountered in H1 2011, of $11.6 million (2010 loss:$4.4 million). This includes £2.7m of financing costs and a $4 million non cash write down of the value of goodwill acquired in the purchase of Digitek Holdings Ltd.

·; Total equity fundraising of approximately £2.4m during the year

·; Completion of Reverse takeover of S.M. Digitek Ltd. in September 2011

·; Several new clients won

·; Technical issues in H1 2011 finally overcome

·; H2 withdrawal of Android support by previous chip set manufacturer causing delay in launch of Android product

Post Year-end Events

In January of this year, the Company announced that it had raised £150,000 on a first closing of a financing. In total the PeerTV has raised approximately £400,000 before expenses since year end.

On 1 February 2012 the company announced that Moshe Bartov had been appointed as Chief Executive Officer of PeerTV Ltd. effective immediately and was also joining the Board of PTV Plc. At the same time Ofer Barda, Chaim Bechor, Eatamar Drory and James McGeever resigned from the Board of the Company with immediate effect. Ofer Barda also resigned as CEO of SM Digitek at that time and was replaced by Avi Vermus.

On 30 April 2012 the Company announced a restructuring of the debt of SM Digitek.

On 28 May 2012 PeerTV announced the first commercial sales contract of its new Android set top box.

In June the holders of a Loan Note of the Company were asked to and approved at a loan note holder meeting the capitalization of interest payments due in June and December 2012. The Company made this request to strengthen its working capital position.

The Annual report and the auditor's report include the following statements

Auditors Report: Emphasis of matter - going concern

In forming our opinion, which is not qualified, we have considered the adequacy of the disclosures made within note 1e of the accounting policies concerning the group's and the parent company's ability to continue as a going concern. The group incurred a net loss of $11,628,000 during the year ended 31 December 2011 and had net liabilities of $620,000 as at that date. This, along with the other matters explained within note 1e of the accounting policies, indicate the existence of a material uncertainty which may cast a significant doubt about the group and company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the group and company were unable to continue as a going concern.

Annual Report: Going concern

During the year the group incurred a loss of $11,628,000 and had net liabilities of $620,000 as at the year end. The directors are in the process of raising additional funds to provide working capital. The directors are confident that the acquisition of Digitek Holdings Ltd will produce significant operational benefits as set out in the Chairman's Report. Since the year end the directors have created Digitek SMT Assemblies Ltd which serves as a marketing and financing company. The company has been reducing its liability to its principal bank and has replaced the bank with an investor financing facility. The directors believe they will fully repay the bank in Q3/Q4 2012. The group has also been successful in soliciting new customers and the directors believe they have a re-established entity.

The directors believe that due to the aforementioned restructuring, the private placing that has and is about to take place in 2012, that the company is a going concern. However, the future of the group is dependent on the directors being successful in their bid to secure finance and the group achieving its trading projections.

Subject to the group's ability to raise required funds, the directors consider that it is appropriate to prepare the financial statements on the going concern basis. If additional financing by whatever means is not secured in the next twelve months, then it is unlikely that the group be able to continue in its present form.

The financial statements do not include any adjustments that would be necessary should this basis not be appropriate.

The full audited accounts are available from the Company's website: www.peertv.com and will be posted to shareholders in the next few days.

 -ends-

Further enquiries:

PeerTV Plc

Leon Nahon, Chairman +972 974 07315

Libertas Capital Corporate Finance Limited

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

Rivington Street Corporate Finance

Jon Levinson/Eran Zucker +44 (0) 20 7562 3384

Bishopsgate Communications

Nick Rome/Sam Allen +44 (0) 20 7562 3350

[email protected] 

Appendix

CHAIRMAN'S STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2011

I was appointed a director and became your Chairman on 23 March 2011.

We have had a challenging year during which we have sought to address certain fundamental problems which arose in both of our businesses.

We acquired 64.12% of Digitek Holdings Ltd in September and shortly after acquisition we were faced with a change in management and a need to replace our bankers. Avi Vermos became CEO and has steered the business through difficult times very adeptly. We have created Digitek SMT Assemblies Ltd which serves as a marketing and financing company. We have been reducing our liability to our principal bank and have replaced them with an investor financing facility. We believe we will fully repay the bank in Q3/Q4 2012. The business has been active in soliciting new customers and we believe we have re-established stability.

In PeerTV Ltd we have been faced with a residue of operational and financial issues. In Q1 2012 we replaced management and Moshe Bartov, who brought a considerable background to us, was appointed Chief Executive. The main issue has been a slowdown in sales from our traditional market and from our traditional product. Moshe has been making a transition to an Android based product and a first model was showcased at a major trade fair in London in March 2012.At the same time he has been refocusing the business on Tier 2 and Tier 3 telecom operators, a market which we believe will prove more productive for us. We hope to be taking orders for the Android product later this year and the level of enquiries so far is very gratifying.

Financially we have had a busy year trying to address the financial requirements which inevitably follow business challenges. The business of Digitek is now financed with a separate investor funded structured credit facility. The business of Peer TV which is also being restructured and the parent company overhead has been funded by equity placing.

Your board is aware of the financial problems and are taking steps to ensure that sufficient finance is available.

I should like to take this opportunity of thanking my colleagues on the Board of PeerTV Plc for their very hard work under stressful conditions and I would also like to say thank you to our two founders, Chaim Bechor and Eatamar Drory for the work they did prior to them leaving the company. Both of them continue to assist the company in various issues.

I hope that we will be able to report positive business progress in the coming months from this year of transition.

L R Nahon

Chairman

PEERTV PLC

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2011

PEERTV PLC COMPANY NUMBER: 7068350

CONSOLIDATED BALANCE SHEET

AT 31 DECEMBER 2011

The financial statements were approved and authorised for issue by the Board of Directors on 29 June 2012 and were signed below on its behalf by:

L R Nahon

Director