Elsight (ASX:ELS) Boasts Busy September Quarter, Aims To Cash In On Opportunities From Ongoing Crisis

  • November 04, 2020 11:39 AM AEDT
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Elsight (ASX:ELS) Boasts Busy September Quarter, Aims To Cash In On Opportunities From Ongoing Crisis

Summary

  • Halo became ready for mass deployment upon receiving FCC and CE certifications during the second half of July.
  • ELS received large initial Halo order worth US$1.6 million and a new partnership with Kinetx Prime and first material Halo order from Alrena.
  • ELS’s FAA certification process for ELS’s partner using Halo remains on track, and the Company is well-positioned to build on its initial success with Halo.
  • At quarter-end, ELS’s cash and cash equivalent stood at US$710,000 with approximately US$2.1million cash receipts expected in the next 90 days.

Breakthrough hybrid video and data transport services provider, Elsight Limited (ASX:ELS) engages in the development of advanced communication technologies for real-time video, audio and data transmission in mission-critical environments over existing network infrastructure. The Company has been through a progressive quarter ended 30 September 2020 and has achieved key milestones in its journey, ramping up its manufacturing capabilities to meet the increased demand for its products.

Let us look at these developments in detail.

Did you read: Casting an eye over the breakthrough Connectivity Platform of Elsight – Halo

Commercialisation of Halo Progressing Well

Beginning with the second half of July 2020, ELS’s Halo was suitably placed for mass deployment for the first time as the Company obtained the FCC, CE and other mandatory certifications. Subsequently, ELS has continued to resume commercial sales and several Proof-of-Concept Trials (POCs) that were halted due to travel restrictions in the light of the COVID-19.

The optimisation of health and safety precautions by ELS enabled the Company to make significant progress towards advancing field operations, especially to support continuing POCs while eliminating the likeliness of a complete shutdown even if any one of the employees falls ill.

The Company has pulled up its socks to capture benefits from the opportunities for Halo emerging in numerous vertical markets. This pertains to special focus in key areas like drone and robotics operations, rural communication as well as telemedicine.

These POCs with drones are important for ELS to secure a design win. The successful conclusion of these trials leads to a specific design win which paves the way for Halo to be installed in any such drone sold in the future without further need for follow-on activities. This is primarily because once a specific drone receives the FAA and similar certifications, they do not permit a change of any certified component.

Besides an enhancement of corporate networks in rural and remote areas, telemedicine, and nurse practitioner solutions, ELS is also progressing well with additional trials for drones, robotics as well as control vehicle backhauling and command post vehicle/command.

Interesting read: Elsight’s connectivity platform is bridging the digital divide

Securing Key Partnerships and Orders

The Company has partnered with Kinetx prime LLC signed a comprehensive agreement that marks only the initial order of a US$1.6 million. The initial order pertains to broadband accessibility technology for telehealth and other rural and remote services.

The rationale behind the partnership with Kinetx prime is that COVID-19 has necessitated remote working and learning, and many countries are still trying to cope with the digital accessibility in rural areas. Moreover, they are also dependent on telehealth and remote healthcare that cannot operate without proper connection to the internet. However, there is a possibility to have such remote learning in the absence of a steady internet connection.

Interesting: Elsight Declares Major Progress Across Portfolio | ASX Market Update

This initial order marks the strategic partnership with Kinetx Prime, and as the partnership progresses, ELS expects further orders to flow in of even bigger value during 2021 and beyond.

Telemedicine innovator and IoT award winner Alrena Technologies in France also placed its first order with Elsight for Halo for a value of US$300,000. Alrena shall integrate Halo into its Smart Medibag, which is an ultralight backpack version of Alrena’s Smart Medicase.

Medibag has been adopted by the French Ministry of Health and is being used by remote nurses and paramedics in rural areas with communications and accessibility problems that have only worsened with the emergence of COVID-19.

Detailed discussion at: Elsight (ELS) Bags US$133,000 Repeat Order from Leading Cash-In-Transit and Security Company

Progress Related to Certifications

ELS’ Halo has received two levels of communication product certification from the FCC in the USA, along with Supplier's Declaration of Conformity granted in July with full certification. While this indicates a key step, qualifying ELS to offer communications solutions, especially in the Drone sector in the USA and Canada. ELS further obtained a CE certification required for the European Union and the UK.

Several additional waivers were announced by major companies such as Amazon and Google during the quarter to enable trial operations on people. ELS further defrosts the fact that approvals like these indicate a stage which had been undertaken by ELS and its partners long ago to be at the stage where final FAA Type Certification is now awaited and are just early waivers for trials and test use in confined areas.

Notably, Halo holds a key place in the FAA Type Certificate test, which shall enable ELS to become the world’s first specified drone’s communication component, subject to being successful.  

Did you read: A Walk-Through Elsight’s Performance during the First Half of FY20

ELS has already successfully walked a major part of the actual testing phase in California during the third quarter, and a final decision is awaited in fourth quarter of 2020. ELS is optimistic that the publishing of final decision of these Halo’s product shall boost commercial position in this vibrant market.

After the quarter-end, Mr Nir Gabay decided to step down from his role as the CEO and the director of ELS and was replaced by Mr Yoav Amitai.

On the revenue front, ELS expects multiple cash receipts amounting to approximately US$2.1 million in the next six months due to several existing contracted orders. On 30 September 2020, ELS’s cash and cash equivalent balance stood at US$710,000.

In a nutshell, ELS seems suitably positioned to translate commercial opportunities into reality. Moreover, ELS is confident to build on its initial success with Halo while drawing value from the extensive range of opportunities presented through the current crisis to further accelerate the commercial outcomes into 2021 and beyond.

Did you read; Scan through Elsight’s Remarkable June Quarter Performance

ELS traded at A$0.645 on 4 November 2020 at 10:45 AM AEST, with a market capitalisation of A$66.35 million.

 

 


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