Final Results

Orca Interactive Ltd
02 February 2005

                              Orca Interactive Ltd

                              Preliminary Results
                      for the year ended 31 December 2004

Ra'anana, Israel, 2 February 2005 - Orca Interactive Ltd ('Orca'), a global
leader in the IPTV middleware market, announces its maiden preliminary results
following its successful admission to AIM in October 2004.

Financial Highlights:

•     Revenue increased by 106% to $5.2 million (2003: $2.5 million)

•     Net loss reduced to $1.8 million (2003: $4.9 million)

•     Healthy balance sheet with net cash of $24.5 million

•     Positive outlook for the IPTV market in 2005 and beyond

Operational Highlights:

•     Three new commercial deals signed during the year  - Atlas Interactive and
      I-Spatial Communications in India and Magnet Networks in Ireland  - and a 
      market trial commenced with a Western European telco

•     Release of RiGHTv 4.2(TM) in October 2004 - two customers already upgraded

•     500,000 subscriber benchmark record set for Orca IPTV Solution in
      conjunction with HP

•     Taiwan's Chunghwa Telecom purchased additional licenses

•     Global partnership agreements signed with more leading IPTV players

Announced today:

•     IBM announced as a new global marketing partner


Haggai Barel, Chief Executive Officer of Orca, said:

'2004 was a significant year in the ongoing growth of Orca culminating in our
successful listing and fundraising in October.  It was also the year that the
IPTV market began to experience significant growth and, as one of the leading
providers of middleware solutions to this market, we were well positioned to
benefit.  Our financial performance across all metrics was strong as we doubled
revenues and halved our operating loss.

As at today's date, we are currently involved in over 25 trials/tenders for our
product worldwide and expect to announce further contract wins shortly.

The significant opportunities becoming available in IPTV and current trends in
the company's performance give us confidence for 2005 and beyond.'

Enquiries:

Orca Interactive Ltd
Haggai Barel, Chief Executive                                [phone]

Financial Dynamics
James Melville-Ross / Cass Helstrip                          [phone]



About Orca (LSE: ORCA)

Orca Interactive (LSE: ORCA) is a leading provider of middleware solution to
enable xDSL and FTTx operators to offer enhanced entertainment services such as
broadcast TV, video-on-demand and interactive services. Our applications deliver
compelling and differentiated services to maximize the revenue stream of the
operators. Orca's user-friendly, end-to-end applications enable delivery and
management of VOD, TV channels, EPG, NVOD, Pay-Per-View and e-commerce for
related merchandise. Orca Interactive has formed strategic partnerships with
Amino, BitBand, GooMe, ECI, HP, IBM, Kasenna, Kreatel, Microsoft, nCUBE, NDS,
Nokia, Nortel Networks, Optibase, Pace, Samsung, SeaChange and more).
www.orcainteractive.com.

Chief Executive's Review

Overview

2004 was a significant year in the ongoing growth of Orca culminating in our
successful listing and fundraising in October.  It was also the year that the
IPTV market began to experience significant growth and, as one of the leading
providers of middleware solutions to this market, we were well positioned to
benefit.

Our financial performance across all metrics was strong as we doubled revenues
and halved our operating loss.  Three new customers were won during the year,
including one for which Orca acted as the prime contractor. This emphasizes the
strong positioning of our product offering and provides further evidence of the
exciting and rapid growth in our market place.  Our partner programme has also
continued to develop and includes some of the most high profile names in the
industry.

Financial performance

Revenues of $5.2 million compared to $2.5 million in 2003, representing a 106%
increase and reflect our success in winning new contracts in a growing market.
Revenue as classified by customer location, was 69.7% Far East (2003: 79.4%),
28.6% Europe (2003 : 6.3%) and 1.7% RoW (2003: 14.3%). Gross profit for the
fiscal year was $3.9 million (2003: $2.1 million).

Total operating expenses for the year decreased 14.6% to  $6.0 million (2003:
$7.0 million). Despite a year on year reduction, research and development costs
of $2.0 million (2003: $2.9 million) were higher than originally budgeted. This
was due to an acceleration in the development of a new application (previously
expected to be launched in the second half of 2005, now the first half). In
addition, following the successful development and sales of Orca's RiGHTv
product, an amount may now need to be returned to the Office of the Chief
Scientist in Israel as a royalty and thus is not shown as a deduction from R&D
expense.

Financial income increased to $0.2 million for the year (2003: $0.01million).

The net loss for the year 2004 was $1.8 million or $0.11 per share, as compared
with a net loss of $4.9 million or $0.41 per share in 2003, a decrease of 63%.
The directors do not intend to declare a dividend.

Orca closed the year with a strong net cash position of $24.5m following the
fundraising on AIM in October.  Operating cash outflow during the year was $0.4
million (2003: $6.2 million).

Product development

In October 2004 we announced the release of RiGHTv 4.2(TM), the newest version
of our IPTV software, incorporating new features such as RiGHTv XPVR (Personal
Video Recorder), SUI SDK, Subscriber User Interface Software Development Kit for
TV services customizations, and new capabilities to host 3rd party IPTV
applications.  Two existing customers, iVISJON and FiberCity have already
purchased upgrade licenses.

In December 2004 we announced, with our partner HP, the results of a
record-breaking benchmark demonstrating the very high scalability of the Orca
proposition.  The benchmark simulated an active subscriber base of 500,000
people accessing our RiGHTv 4.2 solution.  This is the first time an IPTV
solution has been shown to reach this threshold in a commercial simulation;
previously published benchmarks in 2003 demonstrated approximately 100,000
users. Even at the much higher subscriber load, average response times remained
relatively constant, demonstrating the fundamental scalability of the Orca
solution.

Customers and Partners

During the year, Orca signed three new commercial partners to its offering;
Atlas Interactive and I-Spatial Communications in India and Magnet Networks in
Ireland.   In addition Taiwan's Chunghwa Telecom continued to expand and
purchase additional licenses from Orca.

Following successful lab trials, Orca has also entered into an agreement with a
Western European telecoms operator to provide its RiGHTv technology for a
marketing trial.

Orca has signed additional global partnership agreements with more of the
world's leading IPTV players, for example, SeaChange International, Nortel
Networks, Lucent, Zhongxing Telecom Co. (ZTE), Redback Networks and Widevine
Technologies.

Orca has also announced today that it has signed a global co-marketing agreement
with IBM, to promote its products in telco tenders worldwide.

AIM Listing

In October, Orca successfully completed its initial public offering on the
Alternative Investment Market of the London Stock Exchange. 14,141,414 new Orca
ordinary shares were allocated to institutional and other investors at a price
of 99 pence per share, raising approximately £14 million for the Company.  The
IPO, public profile and funds raised have increased our credibility in the
market, provided us with an appropriate platform from which to accelerate the
adoption of our products and given us the financial strength and flexibility to
grow effectively within our markets, both organically and through selective
acquisitions.

Outlook

The IPTV market is evolving rapidly.  Middleware sits at the heart of the IPTV
value chain and, with an established position as one of the leading middleware
providers to this market, we are ideally positioned to benefit from its
anticipated growth.

As at today's date, we are currently involved in over 25 trials/tenders for our
product worldwide and expect to announce further contract wins shortly.

The significant opportunities becoming available in IPTV and current trends in
the company's performance give us confidence for 2005 and beyond.

Haggai Barel
Chief Executive Officer

2 February 2005

BALANCE SHEETS
U.S. dollars

                                                                                 31 December
                                                                            2003           2004
ASSETS

CURRENT ASSETS:

Cash and cash equivalents                                               $     103,124  $   23,579,427
Trade receivables and unbilled accounts, net                                1,504,597       1,335,173
Other accounts receivables and prepaid expenses                               118,719         120,410

Total current assets                                                        1,726,440      25,035,010

LONG-TERM MARKETABLE SECURITIES                                                     -       1,000,000

SEVERANCE PAY FUNDS                                                           436,585         444,871

PROPERTY AND EQUIPMENT, NET                                                   828,748         493,869

                                                                        $   2,991,773  $   26,973,750
                                                                                  
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES:

Trade payables                                                          $     137,566  $      343,060
Deferred revenues                                                              69,793          14,875
Other accounts payables and accrued expenses                                1,171,675       2,476,960
Parent company                                                                      -         875,088

Total current liabilities                                                   1,379,034       3,709,983

ACCRUED SEVERANCE PAY                                                         667,706         686,945

CONVERTIBLE LOANS FROM PARENT COMPANY                                      18,909,984               -

SHAREHOLDERS' EQUITY (DEFICIENCY):

Share capital:

Class A Preferred shares of NIS 0.01 par value: Authorized:                    
17,000,000 and 0 shares at 31 December 2003 and 2004, respectively;            
Issued and outstanding: 12,098,327 and 0 shares at 31 December  2003
and 2004, respectively                                                         29,196               -
Ordinary shares of NIS 0.01 par value: Authorized: 3,000,000 and                   
55,000,000 shares at 31 December  2003 and 2004, respectively; Issued
and outstanding: 23,900 shares and 35,323,799 at 31 December 2003 and
2004, respectively                                                                 51          81,305
Additional paid-in capital                                                  3,002,698      45,338,723

Accumulated deficit                                                      (20,996,896)    (22,843,206)

Total shareholders' equity (deficiency)                                  (17,964,951)      22,576,822

                                                                        $   2,991,773  $   26,973,750
                                                                                  

STATEMENTS OF OPERATIONS
U.S. dollars
                                                                  Year ended 31 December
                                                            2002               2003             2004

Revenues                                              $      757,367     $   2,524,738    $   5,201,970
Cost of revenues                                             236,543           470,634        1,261,675

Gross profit                                                 520,824         2,054,104        3,940,295

Operating expenses:
Research and development, net                              3,670,664         2,904,840        2,016,330
Sales and marketing, net                                   2,836,515         3,279,745        3,174,952
General and administrative                                   970,171           825,366          795,198

Total operating expenses                                   7,477,350         7,009,951        5,986,480

Operating loss                                             6,956,526         4,955,847        2,046,185
Financial income, net                                         16,615             9,768          199,875

Net loss                                              $    6,939,911     $   4,946,079    $   1,846,310

Basic and diluted net loss per share                  $         0.58     $        0.41    $        0.11

Weighted average number of shares used in                 12,021,435        12,079,771       17,145,648
computing basic and diluted net loss per share


STATEMENTS OF CASH FLOWS
U.S. dollars

                                                                        Year ended 31 December
                                                                 2002            2003            2004

Cash flows from operating activities:
                                                           $  (6,939,911)   $   (4,946,079)    $  (1,846,310)
Net loss                                                               

Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation                                                      513,700          490,927          382,579
Decrease (increase) in trade receivables and unbilled             104,184      (1,425,593)          167,733
accounts, other accounts receivables and prepaid expenses
Decrease (increase) in inventories                                (1,658)           59,512                -
Increase (decrease) in trade payables and other accounts          128,891        (128,326)          946,779
payable and accrued expenses
Increase (decrease) in deferred revenues                          289,948        (249,177)         (54,918)
Increase in accrued severance pay, net                             33,108           44,629           10,953
Other                                                                   -          (1,895)                -

Net cash  used in operating activities                        (5,871,738)      (6,156,002)        (393,184)

Cash flows from investing activities:

Investment in long-term marketable securities                           -                -      (1,000,000)
Purchase of property and equipment, net                         (613,918)        (425,857)         (47,700)
Proceeds from sale of property and equipment                            -            4,342                -
Proceeds from short-term bank deposits                            142,880                -                -

Net cash used in investing activities                           (471,038)        (421,515)      (1,047,700)



STATEMENTS OF CASH FLOWS continued
U.S. dollars


                                                                       Year ended 31 December
                                                                 2002           2003           2004

Cash flows from financing activities:

Parent company                                                         -              -           875,088
Collection of receivables on account of shares                     6,542              -                 -
Issuance of Class A Preferred shares to Parent Company,                -        227,273                 -
net
Issuance of shares upon exercise of employees' share               4,813          1,760            25,167
options, net
Issuance of shares upon Initial Public Offering                        -              -        25,181,535
Issuance expenses                                                      -              -       (2,561,020)
Convertible loans from Parent Company                          6,353,509      6,352,942         1,396,417

Net cash provided by financing activities                      6,364,864      6,581,975        24,917,187

Increase in cash and cash equivalents                             22,088          4,458        23,476,303
Cash and cash equivalents at the beginning of the period          76,578         98,666           103,124

Cash and cash equivalents at the end of the period         $      98,666    $   103,124     $  23,579,427
                                                                                  
Supplemental disclosure of cash flows activities:

Non-cash activities:
Conversion of convertible loans from parent company into   $           -   $          -    $   20,306,401
shares                                                            

Issuance accrued expenses                                  $           -  $           -    $      564,000


Note

A copy of the Annual Report and Financial Statements for the year ended 31
December 2004 will be posted to the shareholders in due course. Copies of this
announcement can be obtained from Financial Dynamics, Holborn Gate, 26
Southampton Buildings London WC2A 1PB or from the Company's website -
www.orca.tv



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