Raisebook

Israeli Tech Company to List on ASX: Limited Allocation for IPO
Elsight
Elsight
ASX:ELS

A small allocation has been secured by Raisebook for this in-demand IPO. Maximum investment is $10,000.

Elsight (ELS) is acquiring 100% of the shares of El-Sight Israel as part of an ASX listing and A$6.5m capital raising.

ELS has developed an innovative high-bandwidth-mobile-secured-datalink product which enhances the traditional live data transfer methods with a multi-link based technology (the Multichannel product) which is capable of high bandwidth, stable and secured live data transfer.

Raise Amount
$6,500,000
Offer Price
$0.2000
Closes
May 23, 2017

The technology is currently used in various real-time live data transfer, including tactical security and surveillance, and the company is developing new applications for the technology.

The company is raising a maximum of A$6.5m via the issue of 32.5m shares at 20 cents.

On completion of the offer (assuming full subscription), ELS will see an EV of A$11.7m and net cash of approximately A$6.0m.

RM Corporate Finance have been appointed as Corporate Adviser and Lead Manager to the Offer.

Elsight's Revolutionary Multichannel Technology

  • Multichannel provides live video, audio and other data transmission, as well as recording capabilities, anytime and anywhere, via multiple 3G networks, Wi-Fi or satellite (CPE), keeping your video and data integrity constant at all times
  • The system extends the bandwidth capabilities of streaming video, audio and other data by aggregating unlimited number of network links (3G / LTE / ETH / SAT / Wi-Fi / Wi-Max) to transmit a single data stream with nearly zero latency
  • Multichannel can act as a standalone solution or a gateway to Elsight’s full range of products, thus expanding the visual reach in the field and providing decision-makers with the best online tools for taking the right action
  • This technology has been developed into a range of products, including portable devices, vehicle mounted and fixed/wall mounted devices for use for secured datalink in tactical security and surveillance situations, with potential for additional applications
  • High speed and optimised video quality with minimal latency due to unparalleled aggregated multi-channel scalable bandwidth
  • Solid and reliable "in motion" video and data transmission in extreme conditions due to the ability to determine and aggregate optional routes of transmission that allows for streaming in poor reception situations
  • Secured transmission due to the multichannel method of dividing the broadcast into numerous parts and transmitting them separately through different channels, thereby limiting interception (additional encryption is also available).
  • The technology is a combined hardware, firmware and software solution developed over a number of years with the combined tactical and technological expertise of the El-Sight Israel team and is difficult to imitate.
  • The technology is currently used by first responder and homeland security services in Israel including: SWAT and special forces teams; Israeli police services; Israeli emergency services; military and defence services.
  • The technology has recently been tested in emergency medical situations in France by enabling first responder paramedics to live stream an accident scene to a panel of doctors for consultation on actions to take based on the scene being viewed online and with high definition.
  • Following completion of the acquisition and the offer, the company will be focusing on the continuation of the commercialisation and ongoing development of the technology and growing profitable sales revenues.

Business Model

Elsight operates in a market expected to grow to $133 billion by 2020, where contracts signed are in the order of tens and hundreds of millions of dollars.

The company’s business model revolves around completing the acquisition and continuing the commercialisation of the technology.

El-Sight Israel has commenced commercialising the technology and to date has modest revenue streams. Business model is based on the expansion, through the funds raised under the offer, of the use of the technology both within Israel, but also to other countries around the world.

In addition, the company will seek to expand on the usefulness of the technology beyond its current military and security uses to be applied to new verticals, which may include: real-time high definition streaming for the media and broadcast markets; telemedicine; developing secure connections between business or government facilities; and usage in autonomous cars and trucks.

The Offer

An IPO of up to 32.5 million shares at an issue price of $0.20 to raise a maximum of $6.5 million (before expenses of the offer).

The pro-forma capital structure of the company following the offer (based on the maximum A$6.5m raising) and the conversion of outstanding converting notes will be approximately as follows:

Pro Forma Corporate Structure (A$6.5m raise)
Shares
Currently on Issue 10,000,000
IPO Shares 32,500,000
Vendor Shares 35,381,386
Partial Loan Repayment 7,166,667
Convertible Notes 5,833,338
Total Shares (undiluted) 90,881,391
Options
Options (ex 20c, 5 years) 38,608,000
Options (ex 30c, 3 years) 7,000,000
Financial Metrics
Share Issue Price (A$) $0.20
Market Capitalisation (A$) $18,176,278
Enterprise Value (A$) $11,676,278
Pro Forma Cash (A$) $6,000,000

Additional Information

This deal closed on May 23, 2017