PTV Peertv

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RNS Number : 4508K

PeerTV PLC

16 April 2015

16 April 2015

PeerTV PLC

("PeerTV" or the "Company")

Cooperation Agreement

PeerTV plc (AIM:PTV), a provider of technology solutions for the OTT (TV over the internet) market, and PCB (printed circuit board) production solutions announces that it has signed a second cooperation agreement with Speech Modules Holdings Limited ("SML").

The new agreement grants exclusive rights to PeerTV in all countries except Israel, to market software and hardware products and services, based on proprietary technologies developed by SML, which facilitate and support real time transcription of both live and recorded broadcast TV content, with the exception of news content. Subject to adding suitable software licenses for selected languages, the technologies will also support real time translation of TV content.

SML is a public company quoted on the Tel Aviv Stock Exchange. It has developed a real-time, independent Automatic Speech Recognition ("ASR") engine for spontaneous conversation that SML claims to consistently achieve accuracy in speech recognition of over 95%. It incorporates large vocabularies of any languages, accents and dialects.

The levels of performance of SML's ASR engine in various application compares favorably with that of the world market leader in speech technologies Nuance Inc. which is the originator of the Siri application which is widely used on Apple Inc. products, combining speech recognition with advanced natural language processing.

The agreement will provide PeerTV with an important new market opportunity to offer a solution to broadcasters seeking transcription and translation of their content to meet their customers' needs and enabling them to offer content to wider audiences. The feature is expected to be of particular interest to hearing impaired viewers.

The option of incorporating the SML technology in PeerTV Set Top Boxes for the OTT market is likely to prove a strong competitive advantage both with consumers and with content providers.

Under the Agreement, SML will be responsible for all aspects of the development and implementation of the ASR technology resulting in an automatic system providing online subtitles in the North American English language, will be added on the video through an application operated using a set-top-box developed by PeerTV. The system shall run on a cloud server and shall provide fast transcription with a delay of up to a maximum of 2 seconds.

Development is expected to be completed within 60 days and PeerTV plans to start marketing by that time.

PTV and SML have agreed mutual exclusivity for a minimum of five years. For the duration of the agreement PTV has appointed SML its exclusive provider of ASR technology. The license will be extended automatically after five years, subject to the achievement of sales targets.

Development of advanced remote control units with ASR to be used in home entertainment systems, including TV, audio and games, which was the subject of the first cooperation agreement with SML, announced in January 2015, is proceeding as planned and PeerTV expects to start presenting that new product to customers later in Q2 2015.

Avi Vermus, CEO of PeerTV, commented "Cooperation with Speech Modules provides PeerTV with exclusive access to advanced speech recognition technologies. It will open the way to exciting new market opportunities and add significantly to the attractiveness and general competitive advantages of PeerTV products both in the core OTT business and the wider TV broadcasting market. In parallel, we now have a significant shareholding in a company with outstanding growth potential as automatic speech recognition becomes increasingly mainstream."

Issue of Shares

Subject to formal approval by the Tel Aviv Stock Exchange, under the Agreement, the two companies will issue to each other new shares with a value of GBP200,000.

Accordingly, SML will issue PeerTV with 7,285,000 ordinary shares at a price of 0.16 NIS per share (being the closing price of SML on 10 April 2015). These shares will be subject to a mandatory lock-up period under the Israeli securities law of six months. Following the issue PeerTV will hold 15.66% of the Issued Share Capital of SML. PeerTV will have the right to appoint a director to the board of SML.

PeerTV will issue SML 29,411,765 new Ordinary Shares at a price of 0.68 pence per share (being the closing price of PeerTV shares on 10 April 2015) representing 15.4% of the enlarged share capital. It is expected that in order to finance the development activities that it is committed to undertake under the agreement SML may well decide to sell their shares in PeerTV in the market. However, under the terms of the agreement SML has undertaken not to sell any more than 25% (GBP50,000 value) of their shares in any one calendar month from the date of issue.

The shares to be issued to SML are expected to be allotted within the next week and the appropriate announcement will be made then.

Further enquiries:

PeerTV Plc

Eitan Yanuv, Chairman

Tel: +972 974 07315

ZAI Corporate Finance Limited

Tim Cofman / Richard Morrison

Tel: +44 20 7060 2220

Daniel Stewart & Company plc

David Coffman

Tel: +44 207 7766550

About SML

SML is a publicly traded company on the Tel Aviv Stock Exchange under the ticker (TLV: IL: SPCH). The Company had total assets of NIS 914,000 (as at 31 December 2014) and reported profits after exceptional items of NIS 5.802 million for the period ended 31 December 2014.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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