PTV Peertv

TIDMPTV

RNS Number : 8551R

PeerTV PLC

17 September 2014

17 September 2014

PeerTV PLC

("PeerTV" or the "Company")

Conditional Purchase Order, Update on Digitek Order and Signing of Revolving Line of Credit

PeerTV plc (AIM:PTV), a provider of technology solutions for the OTT (TV over the internet) market, and PCB (printed circuit board) production solutions wishes to announce that it has received an order from Kartina Gmbh ("Kartina"), subject to conditions precedent, to purchase 20,000 Set Top Boxes for a total consideration of approximately $1,200,000 (the "Conditional Purchase Order").

The Conditional Purchase Order is the first received for PeerTV's next generation set top box using H265 HEVC (High Efficiency Video Coding) technology to deliver TV over the internet. The new technology means that content can be streamed via the PeerTV set top box using less than 50% of the bandwidth previously required for other technologies. Significant enhancements to transmission quality have also been reported

The order is conditional on the completion of satisfactory technical due diligence by Kartina in respect of the new Set Top Box product. Accordingly there is no guarantee that such technical approval will be granted or that the Conditional Purchase Order will be finalised. Under the terms of the Conditional Purchase Order, technical due diligence is expected to be completed by 1 November 2014.

A further announcement will be made when Kartina have completed their technical due diligence on the new STB.

It is emphasised that because the Conditional Purchase Order is subject to final technical approval by Katrina, there is no guarantee that such technical approval will be granted. Shareholders should exercise caution when trading in the Company's shares.

The Company also announces that due to customer delays in implementing the mass production stage of the order received by its subsidiary Digitek SMT Assemblies Limited, and announced on 13 May 2014, it is now likely that the project will not be fully completed by the end of 2014, as originally expected. Further announcements shall be made as and when appropriate

The Company also announces that it has signed an agreement in respect of a GBP200,000 revolving line of credit (the "Facility") with CSS Alpha (BVI) Ltd (the "Lender").

Up to GBP100,000 of the Facility will be in the form of either i) Debtor Financing, whereby the Lender will advance not more than 75% of the face value of debtor balances of the Company or the Company's subsidiaries and with full notification to the ultimate customer ("Debtor Financing") or, ii) Purchase Order Financing in respect of purchase orders placed by Kartina ("Kartina PO Collateral") , whereby the Lender will advance not more than 50% of the expected gross margin of any orders subject to the Purchase Order Financing. The Lender may substitute the Kartina PO Collateral with purchase orders placed with Digitek SMT Assemblies Limited at the Lender's discretion. The proceeds will be available to provide working capital, during the coming months required for both existing and expected orders in the two business units including the Conditional Purchase Order if completed. Advances are repayable within 90 days and the interest is 2% per month on Debtor Financing and 5% per month on Purchase Order Financing.

Up to GBP140,000 of the Facility will be available to be utilised to meet certain payments which form part of an overall settlement with the former bankers of the Company's subsidiary SM Digitek (1993) Limited under which the bank is expected to agree to a significant reduction in the total liability. Advances under this part of the facility will be repayable over 12 months and subject to monthly interest of 2%.

Overall, the Facility will be secured by a debenture over the assets of PeerTV plc. Shareholders should note that if the debenture were exercised in the event of default by the Company, this may result in the Company ceasing to own, control or conduct all, or substantially all, of its trading business, activities or assets of the Company.

The Lender will also receive warrants exercisable for a period of five years from the date of each drawdown from the facility in an amount equal to 100% of each drawdown. The exercise price of the warrants shall be equal to the average of the mid-market price of the shares of the Company for the five days preceding the date of each drawdown as set out in the Warrant Agreement. The numbers of warrants issued in respect of each advance will be equal to the amount of the advance, including any related costs, divided by the exercise price.

The Company has requested that the Lender advance an initial GBP100,000 of the Facility immediately and this will result in the issue of 41.2m warrants with an exercise price of 0.25p.

Further enquiries:

PeerTV Plc

Ossie Weitzman, Chief Financial Officer

Tel: +972 974 07315 Ext.0

Daniel Stewart & Company (Nomad and Broker)

Emma Earl / David Coffman

Tel: +44 (0)20 7776 6550

This information is provided by RNS

The company news service from the London Stock Exchange

END

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