Vigilant- intelligent digital video solutions (CCTV).

The company is to list 56,569,478 Ordinary Shares of NIS 0.01 each, as it seeks to raise GBP10 million, before expenses, on admission.



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Company Vigilant Technology
TIDM
Headline Pricing and Listing on AIM
Released 09:00 19-Dec-05
Number 8453V





19 December 2005



Vigilant Technology Limited



Announcement of £10 million Placing at a price of 43p valuing Vigilant Technology at £24.3 million



Vigilant Technology Limited (“Vigilant” or the “Company”) which designs and manufactures sophisticated, “intelligent” solutions for the high-end CCTV security and surveillance market, today announces the pricing of its initial public offering (the "Placing") to institutional investors in connection with the listing of its ordinary shares on the AIM market of the London Stock Exchange. Dealings will start on 20 December 2005. Shore Capital is acting as nominated adviser and broker to the Company.

· The Placing will comprise a total of 23,255,814 new ordinary shares at 43p per ordinary share (the “Placing Price”) to be issued by the Company and representing approximately 41.1 per cent of the enlarged issued share capital of the Company.



· Based on the Placing Price, the market capitalisation of Vigilant on commencement of conditional dealings will be approximately £24.3 million.



· Gross proceeds of the Placing will be £10 million.



· The Company intends to use the proceeds from the Placing to fund the expansion of its sales and marketing team to further its strategy of selling directly, under its own brand name, to systems integrators, dealers and distributors



· Dealings are expected to commence on the AIM market of the London Stock Exchange at 8.00 a.m. on Tuesday 20 December 2005. The ticker will be VGT, the SEDOL number will be B0PN0H0 and the ISIN number will be IL0010947708.



· Sir Trevor Chinn, chairman of the AA, formerly chairman of RAC plc (previously Lex Service PLC), co-chairman of the Israel-Britain Business Council and member of the Tel Aviv University board of governors, is joining the Board of Vigilant as chairman.



Moshit Yaffe-Blushinksy, Chief Executive Officer, said:



"We are delighted the Placing has been so well received and welcome our new shareholders in Vigilant Technology. We are already an established player and technological leader in the rapidly growing high-end CCTV security and surveillance market. The Placing and flotation on Aim will allow us and our shareholders to capitalise on the growing demand for Vigilant’s products against the backdrop of rising terrorism and other security concerns as well as increasing recognition of the role our products can play in crime prevention and detection.”





For further information, please contact:



Citigate Dewe Rogerson +44 (0) 20 7638 9571

Rachel Lankester/ Sally Marshak/ George Cazenove



Vigilant Technology Limited +972 3 649 1110

Moshit Yaffe-Blushinsky



Shore Capital and Corporate Limited +44 (0) 20 7408 4090

Graham Shore / Dru Danford





Notes to editors



Introduction

Vigilant designs and manufactures sophisticated, “intelligent” solutions for the high-end CCTV (closed circuit TV) security and surveillance market. This is a rapidly growing market due in large part to the growing threat of terrorism and other security concerns and the greater recognition of the role live and recorded video can play in preventing and detecting crime.


Vigilant’s systems use proprietary technology, both hardware and software, which it developed internally. The Company’s systems enable end users to record, compress, store, retrieve, review and analyse digital video footage collected from a large number of security cameras.


Over the six years since its foundation, Vigilant has won a “blue-chip” customer list, which is growing as new products and security solutions come on stream. Large-scale installations using Vigilant’s products include local authorities, correctional facilities, airports, transport hubs, banks, shopping malls and casinos. For example, Vigilant’s systems are currently installed in the London Boroughs of Hackney, Hillingdon and Barking, the Bluewater shopping centre and Tel Aviv Ben Gurion Airport.


Vigilant is based in Israel and currently over 95 per cent of its turnover is derived from exports. The Company has supplied large systems in a number of major countries, including the USA, UK, France, Spain, Italy, Greece, South Africa and Argentina.


In addition, Vigilant has a strong research and development programme and is currently trialing its next generation (the ‘Third Generation’) of digital surveillance technology. Vigilant plans to launch systems which will


move closed circuit television to an open system using the Internet Protocol and computer cabling shared with other uses rather than dedicated coaxial cables


introduce machine intelligence into security systems by programming computers to study the video to analyse and track objects, detect movement and unusual sounds, the idea being to program the system to spot possible incidents

History and Background
Vigilant was founded in February 1999 by two brothers, Yoram and Ronen Sagher, together with Adi Pinhas who left the Company three years ago. Their vision was to establish a company to develop surveillance products based on digital video, which would convert analogue video into a digital format, allowing the user to compress it, store it and retrieve the images in electronic format. The Company was a pioneer in this technology of digital video recording.



The Founders and a group of private investors provided seed capital for the Company which initially (during 1999 and 2000) focused primarily on research and development. The Company made its first sale in late 2000. Its development was significantly accelerated when it was selected by Pelco, a US based leader in the design, development and manufacture of video security equipment for a broad range of industries and applications, as a supplier of high-end premium solutions to complement Pelco’s own equipment range.



The Company raised further capital in two rounds in 2000 and in 2002. The Company also received a US $2.1 million grant from the Chief Scientist Fund in Israel to assist with research and development costs.



Vigilant’s Products
Vigilant’s products are designed for mid to large-scale installations in multi-user, mission-critical environments. Large installations require reliable, efficient, cost-effective video storage, decision support, intelligent image analysis, and the ability to upgrade the system as new features are introduced and new industry standards and applications emerge.



The core capabilities present in all of the Company’s products are: the recording, manipulation, storage and retrieval, analysis and transmission of digital video and audio for both live and recorded applications. Vigilant provides users with flexible and scalable/modular mission-critical systems, which can easily be modified to reflect customers’ particular budget, requirements and applications (as high value installations often tend to be large scale and complex). The basic design is inherently capable of providing functionality and additional add-ons.



The Company has developed intelligent tools allowing users to effectively retrieve and analyse information in real time according to specific criteria in a user-friendly manner. Furthermore, the system’s modular design enables the system to integrate new and emerging technologies.



Customers and Contracts
The existing customer base includes: airport authorities (such as the newly constructed Tel Aviv Ben Gurion Airport), transportation authorities and organisations (such as the New York City Triboro-Bridge and Tunnel Authority), local municipalities (primarily town centres – for example, three London boroughs: Hackney, Hillingdon and Barking), leading banks (e.g. the Bank of Greece), shopping centres (such as Bluewater Park in the UK), correctional facilities, corporate buildings and casinos.



Vigilant’s largest and most important project with Pelco is with the New York City Triboro-Bridge and Tunnel Authority (TBTA). The objective of the TBTA project is to protect all of the bridges and tunnels connecting Manhattan Island to the rest of New York City.



In the UK Vigilant has established itself as an important player in the provision of public space digital security solutions. This has manifested itself in particular the key vertical markets of town and city centres, shopping centres/malls. It has also begun to sell to custody facilities.



It has supplied systems for a significant number of UK town and city centre schemes such as the London Boroughs of Hackney, Hillingdon, Barking and Dagenham, as well as regional centres in Reading and Wokingham, Bury St Edmunds and Haverhill, Stevenage, Hertford, Hitchin and several other Hertfordshire towns as well as the Isle of Anglesey.



In addition, Vigilant has already installed its systems in shopping centres in Stratford, Cardiff and Leeds. Other projects in the pipeline include a two-casino project in California, a project with a leading South African system integrator, to upgrade seaport security systems, and a project to upgrade the security for railway stations in Spain.





Development and New Products

Vigilant’s research and development programme has aimed (and continues to do so) to make Vigilant a technological leader in the CCTV industry. The company’s R&D efforts are focused on the following areas:



IP Infrastructure



CCTV installations are still predominantly based on a dedicated network of coaxial cables, which provide a closed circuit around the cameras and monitoring centre. This cabling system was designed for point-to-point transmission of video from a camera to a monitor and a recorder at the same site. The Directors believe that the future of CCTV is to become an integrated part of the organisation’s network by transferring the video using the IP standard.



The open architecture of IP allows surveillance video to use cabling installed for other purposes, such as access control, fire and safety systems, building automation systems, voice and, of course, network traffic. Management of IP systems can be performed on any workstation with access to the network and security staff can be located anywhere on the network. By using IP based solutions it becomes easier to have back-up digital servers in a single location or distributed to multiple locations.



Vigilant’s “Computer Vision” solutions



Vigilant’s “Computer Vision” solutions automate elements of the surveillance of video through advanced ‘machine learning’ features such as object analysis, tracking, direction detection, and audio detection amongst others, and are delivered using its library of software algorithms in conjunction with a digital signal processor (“DSP”) platform. The end result is to use a computer to identify possible incidents so that the operators do not miss activity and can concentrate upon searching the incidents highlighted by the system.



While some of these advanced ‘machine learning’ features have already been sold to major customers, most of them will only be generally available during 2006. The Directors believe that these “state of the art” capabilities/products provide solutions to pressing problems in the CCTV market and put Vigilant at the leading edge of the high-end market with a strong competitive position.



Headquarters and Offices

The Company’s head office is in Tel Aviv, Israel, and the Group has marketing and support offices in both New York and London, through two wholly-owned subsidiaries, namely Vigilant Technology Inc. in the US and Vigilant Technology UK Limited in the UK.



END